Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

Devolution (Referendum)

Mr. Amess: To ask the Secretary of State for Scotland what representations he has received concerning the proposed form of the question for the proposed referendum on Scottish devolution [2329]

The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): The Scottish Office has received seven representations, of which five have suggested that independence or the status quo should also be an option put to the electorate and two have commented on the style of the ballot paper.

Mr. Amess: I welcome the Minister to the Dispatch Box. Now that the new Labour party has led the British people to what is perceived to be the promised land, will the Minister explain to my constituents in Southend, West how it can be fair that they will not be involved in the referendum process? Furthermore, how can he justify the fact that those who will be involved in the referendum process have no precise idea of what they are being consulted about?

Mr. McLeish: I am delighted to welcome the hon. Gentleman to Scottish questions. The question whether there should be a Scottish Parliament is primarily for the people in Scotland. The details of the proposals will be open for debate by all UK Members of Parliament during the passage of the devolution Bill. We think that that is important because it gives the people of Scotland a chance to vote on the two questions in the referendum and to give their consent, and it then allows the devolution Bill to be properly and thoroughly discussed in the House. That should reassure not only the hon. Gentleman but his constituents.

Mr. McAllion: The form of the question in the referendum and other matters relating to the referendum are currently the subject of debate in the other place. Therefore, may I have an assurance from my hon. Friend that he will not suffer any lessons in the democratic running of a referendum from those who owe their place in Parliament either to hereditary privilege or to political patronage? Will my hon. Friend take this opportunity to remind our noble brothers and sisters that Scotland is a democracy where sovereignty rests with the people,

that the people have elected Members of this House to decide on the referendum and that peers interfere in that democratic exercise at their peril?

Mr. McLeish: I fully acknowledge my hon. Friend's comments. However, in the spirit of good will in which we have tried to conduct the debate, I hope that, in another place, there will be reasonable debate and scrutiny of the legislation, and that it will be serious and sensible. I feel very relaxed in the belief that the peers will do that and I do not think that there is anything to be fearful of at this stage.

Mrs. Ewing: I welcome the hon. Gentleman and the full team to the Scottish Office and their new responsibilities. Does the hon. Gentleman share my recognition that the rather offensive comments made during the passage of the Referendums (Scotland and Wales) Bill by Conservative Members and the questions scattered throughout the Order Paper today show that they have learned absolutely nothing from their behaviour in the previous Parliament? Might that not explain the total absence of any Conservative Member north of the Tweed?

Mr. McLeish: Again, I appreciate the hon. Lady's points. It is important for the House to be reminded that the party that promoted the status quo in Scotland did not return a single Member to this House. On the other hand, we want to see the devolution proposals go forward in a spirit that reflects their importance to the people of Scotland. That is why I hope that even Conservative Members will accept my point that this is a vital matter. Clearly, we do not want to see a repetition in the other place of some of the frivolous questions posed in this House.

Mr. Canavan: On the question of consulting the people of Scotland through the ballot box, is it not rather ironic that some of the most vociferous opponents of a Scottish Parliament are Tory rejects who were kicked out by the people of Scotland through the ballot box? I think of people such as the Earl of Ancram—now the right hon. Member for Devizes—Lord Fraser of Carmyllie and Lord MacKay of Ardbrecknish. It is no wonder that the Tories suffered a complete wipeout in Scotland. When will they ever learn?

Mr. McLeish: My hon. Friend makes some reasonable points. Conservative Members, wherever they come from, should acknowledge that this is a very important issue. They should also learn the important lessons of the election on 1 May, which showed that constitutional change is high on the agenda of Scots. We want to move forward on that as quickly as possible.

Mr. Ancram: Does the Minister agree that the proposal in the Referendums (Scotland and Wales) Bill for "a Scottish Parliament" could be supported equally by those seeking independence, who might regard it as the first step along that road, and those, such as the Secretary of State, who claim that it would save the Union? As both cannot be right, does he agree that the current proposition is a dangerous and dishonest fudge and that the only honest course would be to set out the three real options: independence; a devolved, tax-raising Parliament; and the status quo? Or is he frightened of the answer that the Scottish people might give?

Mr. McLeish: I utterly reject the right hon. Gentleman's assertions on two counts. The only party that


had the temerity to favour the status quo was—I choose my words carefully—annihilated. The Scottish people also clearly rejected separatism on 1 May and endorsed our proposals. The Scots will be asked to vote yes, yes in the referendum on the basis of the White Paper that we shall publish before we rise for the summer.

Inward Investment

Mr. Roy: To ask the Secretary of State for Scotland which companies have announced plans to invest in Scotland since 1 May. [2330]

The Minister for Education and Industry, Scottish Office (Mr. Brian Wilson): Since 1 May, ABB Wylex, Award plc, BBR Systems, BT, Canon, ClinTrials Research, FLEXcon, Midland Bank, North American Bolt and Screw Co., Tesco and Yaskawa Electric have announced plans to invest in Scotland. Together, those plans involve the creation of more than 2,200 new jobs.

Mr. Roy: I thank my hon. Friend for his encouraging answer. Does he agree that that blows away the myth created by the Scottish Conservatives—who were, in turn, blown away by the electorate on 1 May—that Scotland would not be able to attract inward investment under a new Labour Government committed to a Scottish Parliament with tax-varying powers, to the social chapter and to a national minimum wage? Will he also join me in congratulating North Lanarkshire council on the effort that it put into obtaining a £10 million investment from the Bank of Scotland for my constituency of Motherwell and Wishaw, which was announced in the past few days?

Mr. Wilson: I strongly agree with my hon. Friend. The only people who believed the Tory propaganda before the election were the unfortunate ones spouting it. They got their answer in no uncertain terms. I have spoken to representatives of several of the companies that I mentioned. They were well aware of the Labour party's proposals on constitutional change, the social chapter, the minimum wage and the rest of it. Those proposals did not influence their decisions. The Tories were simply putting about scare stories, as has been quickly exposed. The decisions were based on the quality of the work force available and the educational basis, as well as the good environment that we can offer in Scotland. I hope to have many more such announcements to make.

Mr. Kirkwood: How many of the new jobs have come to south-east Scotland? Is the Minister aware of the concern expressed locally about employment prospects in the textile industries, particularly in towns such as Hawick, in my constituency, which is suffering from a combination of overseas competition, new technology and the current strength of the pound? Is he prepared to bring together a team of experts and come to Hawick to examine what the Government can do to underpin employment prospects in the hosiery industry in towns such as Hawick, together with the possibilities for a diversification package for the future?

Mr. Wilson: I am well aware that the hon. Gentleman has been involved in those matters over a

long period. I should be delighted to come to Hawick with officials and experts to discuss his precise concerns, and I shall make arrangements to do so.

Mr. Home Robertson: Is my hon. Friend aware that investors from Northern Ireland and the Republic of Ireland are keen to gain access to competitively priced Scottish electricity? He will recall that Michael Forsyth blocked proposals for an interconnector between the Scottish and Irish electricity systems. Does he expect to make an announcement shortly?

Mr. Wilson: Yes.

Sir Peter Tapsell: As my mother's family, the Hannays of Sorbie, have lived in Galloway since the ninth century, may I venture to ask the first question on Scottish affairs in my parliamentary career on behalf not only of myself but of the considerable number of my Scottish constituents who have relations living in Scotland? If, as a result of this exercise, Scottish taxation is to be higher than British taxation, will the Japanese and American firms which have been pouring investment into Scotland still wish to do so?

Mr. Wilson: I congratulate the hon. Gentleman on his antecedents.
The proof of the pudding is in what we have produced in the past month. It is quite clear that investment decisions were made in the full knowledge of the changes that were proposed. Companies in the United States, Taiwan, Korea and Japan probably paid some attention to the opinion polls and expected a Labour Government to be elected. They made investment decisions on that basis and will continue to do so. They will welcome the decentralisation that will enable us to attract projects to Scotland with even more encouragement and enthusiasm.

A90 (Road Safety)

Mr. Swinney: To ask the Secretary of State for Scotland if he will undertake an urgent review of road safety on the A90 with particular reference to the Forfar, Angus stretch. [2331]

The Parliamentary Under-Secretary of State for Scotland (Mr. Malcolm Chisholm): Road safety at the Glamis and Kirriemuir junctions on the A90 Forfar bypass is closely monitored on a regular basis. Additional signing has recently been approved and will be installed shortly.

Mr. Swinney: Will the Minister find time in his busy day to take the opportunity, as I did yesterday, to view five minutes of video footage from Tayside police showing some of the horrors that take place at those two junctions? There is an urgent need for a safety review and a medium-term strategy for a graded junction to be built, including an underpass. Will the Minister give a commitment that the Government will consider that as an early priority?

Mr. Chisholm: I will, of course, look at the video footage. I am concerned about the number of accidents that have occurred at the junctions in spite of numerous


accident investigations and prevention measures, including the new one to which I referred. I shall also look at the case for grade separation. Let me say more generally that safety will be a key criterion in the roads review to be announced later this week.

Government Spending

Mrs. Ann Winterton: To ask the Secretary of State for Scotland if he will make a statement on per capita government spending in Scotland. [2332]

The Secretary of State for Scotland (Mr. Donald Dewar): Identifiable general government expenditure per head in Scotland was £4,614 in 1995–96, the last year for which complete figures are available.

Mrs. Winterton: Will the right hon. Gentleman confirm that per capita expenditure in Scotland is 24.6 per cent. higher than in England? Bearing that in mind, why should the United Kingdom Parliament continue to vote extra funding for Scotland if Scotland has its own tax-raising powers? Will not the Assembly cost Scotland's people dear?

Mr. Dewar: No, I do not agree with the hon. Lady. If she is concerned about the way in which we organise our expenditure allocation in the United Kingdom, she will recognise that the system has been well established for many years under the previous Government, whom I think she supported. If she wants to get into an argument, no doubt she will wish to look at the health statistics, the population sparsity statistics and the economic deprivation statistics and recognise that the United Kingdom is a partnership in which we pool our resources and allocate them on an agreed basis.

Mr. Doran: Is my right hon. Friend aware of the serious problems affecting in particular the north-east of Scotland, due to drug abuse, which may merit much higher expenditure in Scotland? He may have seen press reports of the death of four people in Aberdeen in the past few days due to drug misuse and overdoses. When he considers public expenditure in Scotland, will he give a commitment that the fight against drugs will remain a high priority in the Government's programme?

Mr. Dewar: I share my hon. Friend's concerns, as I think will the whole House. That is the reason why we have given particular prominence to drug-related measures in the Scottish Office block, and why I and, to be fair, the leaders of other parties in the House support Scotland Against Drugs and give it our energetic and active help.

Mr. Wallace: Does the Secretary of State agree that the kind of question asked by the hon. Member for Congleton (Mrs. Winterton), and the thinking behind it, are among the reasons why there are no Scottish Conservative Members present today? Indeed, Opposition Front Benchers have such a tenuous hold that they have had to put in Prayers cards to keep their seats. Any party that truly believes in the United Kingdom would recognise that the principle of equalisation underpins the Union. Following last week's uncertainty about the future

of the Barnett-Goschen formula, will the Secretary of State confirm that, as the partners of the Scottish Constitutional Convention agreed, the
current formula for the calculation of government expenditure in Scotland will continue to be used as the basis for the allocation of Scotland's fair share of UK resources"?

Mr. Dewar: I say in passing to my hon. Friend—

Mr. Burns: Hon. Friend?

Mr. Dewar: There you are. All I was going to say was that the power of prayer is something that the main Opposition party will have to rely on very often in the months ahead. I suspect that a few Opposition Members are on their knees even at this moment.
On the points made by the hon. Member for Orkney and Shetland (Mr. Wallace), I should emphasise the well-established nature of the present arrangements—the block and formula system. The White Paper on devolution will set out the position very clearly, as my right hon. Friend the Chief Secretary to the Treasury made clear on 11 June, when he emphasised that the Government believe that the formula plays a very important part in the allocation of public expenditure.

Dr. Godman: Although these are early days—my right hon. Friend has been in office only six weeks—what progress has he made in targeting funding towards the national health service in Scotland and our education system? Those matters are of considerable importance to many of my constituents, particularly in the light of the long waiting lists at the local hospital that were the fault of what is now a largely rural English party.

Mr. Dewar: We are trying, where we can, to reorder priorities in a way of which I think my hon. Friend would approve. A number of early measures were taken within this year's budget that resulted in £13 million going to the education budget, particularly for literacy and other such problems, and £10 million being found to transfer to the health service budget, with a particular target of reducing specified areas of waiting lists in the NHS.

Local Government Finance

Mr. Maude: To ask the Secretary of State for Scotland what estimate he has made of Scottish local government revenue support in the current year. [2333]

Mr. Chisholm: The 1997–98 local government finance settlement set the level of non-housing revenue support at £5,256.7 million.

Mr. Maude: Will the Minister confirm that that estimate includes provision for a full inquiry into alleged corruption in Glasgow, Govan?

Mr. Chisholm: That is not the issue in that money. The people of Glasgow of course have the right to expect the highest standards of conduct, and that is precisely what they will get. We are looking forward to the Nolan committee's report on aspects of local government.

Mr. Gorrie: In the light of information that the Minister now has, do the Government want to continue to


support the spending plans that they inherited from the previous Government, as they said they would before the election, with regard to local government? He must be aware of the great concern among many people in Scottish local government that the money available for next year will not allow them to provide adequate services.

Mr. Chisholm: The hon. Gentleman knows full well that we made it clear during the election that we would keep within the levels of inherited expenditure for two years. Having made the promise, we shall deliver it. Of course, the settlement was tight and we realise that it will cause difficulties next year, but we made the promise and we shall carry it through.

Skye Bridge Tolls

Mr. Charles Kennedy: To ask the Secretary of State for Scotland if he will make a statement on his discussions with the Highland council in respect of the Skye bridge tolls. [2334]

Mr. Dewar: I am meeting senior members of the Highland council to discuss the Skye bridge on 23 June.

Mr. Kennedy: Will the Secretary of State take the opportunity to clarify the perhaps unfortunate impression given by the Minister with responsibility for transport in a television interview in Scotland last week when he was asked about the Labour party commitment that the discussions next week will take place against the backdrop of the unambiguous Labour party commitment—given locally during the election and nationally by the Minister—that it would work with the Highland council on a strategy for the abolition of the tolls? Will the Secretary of State confirm that that remains the context in which the discussions will take place? Does he agree that the atmosphere of those discussions would be assisted immeasurably locally if the Lord Advocate were to take early action to suspend, if not terminate and announce a complete amnesty on, the criminal charges against all those currently before the sheriff court?

Mr. Dewar: I appreciate the importance of the issue in the highlands and I recognise that the hon. Gentleman has long campaigned on it. I also appreciate the pressures that he is under from his constituents. We shall approach the talks constructively, but he must recognise that we have inherited a contract and any improvement will cost money that must be found from the Scottish block and, specifically, from the roads budget. That is a difficulty for us. All I can say is that the review will be intended to produce improvements, if possible, and a way forward by agreement, if that is possible. As for the hon. Gentleman's point about prosecution policy, the best way to solve that is for people not to break the law.

Mr. Salmond: On a point of order, Madam Speaker.

Madam Speaker: I take points of order after questions.

Mr. Salmond:: On this question.

Madam Speaker: No. I have dealt with this issue before and the point of order must come after questions.

Mr. Salmond: On this question.

Madam Speaker: The hon. Gentleman is using up the time of other Members who have questions down and the right to put them.

Scottish Office Spending

Mr. Forth: To ask the Secretary of State for Scotland if he will make a statement about the implications of the forthcoming public expenditure survey for Scottish Office spending.[Interruption.] [2335]

Madam Speaker: Order. Question 7 has been called.

Mr. Dewar: My apologies, Madam Speaker. I was distracted by certain happenings, but I am sure that that was unintentional.
There will be no public expenditure survey in 1997, but I shall carry out an internal review of the plans for 1998–99.

Mr. Forth: I welcome the right hon. Gentleman to his post and I remind him that the last time we faced each other in a debating chamber was during my maiden speech in the Glasgow university union in 1962. I have waited a long time to face him again, but I welcome the opportunity. In his reply to my hon. Friend the Member for Congleton (Mrs. Winterton), he said that the existing imbalance in per capita expenditure between Scotland and England was a system that has been "well established". Does he accept that his devolution proposals could or should change that? Does he accept that a Scottish Assembly should use its discretion to raise taxes to justify and to pay for any imbalance between Scottish public expenditure and its level in the rest of the United Kingdom?

Mr. Dewar: I am delighted that the hon. Gentleman remembers Glasgow and that the memories have not been obliterated by his pleasure at being in Bromley and Chislehurst—a pleasure which, I suspect, was acute on 1 May. If he considers his Glasgow memories, he will understand some of the reasons for the differential to which he refers. It is not the intention that revenue-varying powers for a Scottish Parliament are meant, in some way, to compensate for a punitive raid on Scottish finances. I regard that as a perverse and eccentric view.

Mr. Welsh: Why are the Labour Government continuing the Tory Government's policy of self-financing public sector pay awards which can only be funded by service cuts or rising unemployment, which affects both the private sector and local authorities? Why is Labour supporting the fourth and fifth consecutive years of that destructive Tory policy?

Mr. Dewar: We have made clear what our spending limits mean and we shall stay within the announced limits. I hope that the hon. Gentleman will support that.

Mr. Maclennan: If there is to be no increase in expenditure on roads in Scotland during the next two years, will the Secretary of State at least consider a reordering of priorities to enable the north coast road of Great Britain to become a proper two-lane road and to improve the A9 north of Helmsdale into Caithness, as those roads are well below standard and ought to be beneficiaries of a reordered programme for Scotland?

Mr. Dewar: I have on several occasions driven those roads—sometimes to visit the hon. Gentleman—so I understand his point, and no doubt those carrying out the review of the roads programme will bear that in mind.

Mr. Alan Clark: Since the Secretary of State's hon. Friend the Member for Cunninghame, North (Mr. Wilson)—a real friend this time—would not tell The Herald yesterday the cost of putting a Hyundai factory in Fife, will he confirm here to the House of Commons that it will cost the taxpayer £120,000 per job?

Mr. Dewar: I often read what the right hon. Gentleman writes and I have come to the conclusion that I can class it largely as fiction. That figure is not accurate. I hope that he will support the efforts of Locate in Scotland—as well as the efforts of the present and previous Governments—to attract investment to this country.

NHS Trusts (Borders)

Mr. Moore: To ask the Secretary of State for Scotland what plans he has to meet with the chairmen of the NHS trusts in the borders to discuss the state of the trusts' finances. [2336]

The Parliamentary Under-Secretary of State for Scotland (Mr. Sam Galbraith): I have not been approached by the chairmen of the trusts in the borders for such a meeting. However, arrangements are in hand to meet a representative group of trust chairmen in Scotland when a range of issues will be discussed.

Mr. Moore: I hope that the Minister will include representatives from the borders in that group. What steps will he take to end the current uncertainty at the two trusts in the borders as a result of their short-term contracts for the current financial year? In particular, what assurance can he give that the anticipated shortfall of £750,000 at the Borders general hospital will not lead to cuts in patient care?

Mr. Galbraith: The current shortfall is a result of a revaluation of assets and a requirement to pay a 6 per cent. return on capital. That is a matter to be negotiated between the trusts and the health board, and I look forward to a successful conclusion to the discussions.

Mr. Davidson: When the Minister next meets chairmen of health boards, will he mention to many of them that their services are no longer required? Does he remember that many of the chairs of health boards—like their members—are simply Tory placemen who ought to be got rid of by a Labour Government?

Mr. Galbraith: I am currently considering the question of who will chair the health boards and I hope to make an announcement very soon.

Mr. Bernard Jenkin: As the hon. Gentleman cannot even get an assurance from the Chief Secretary on the future of the Barnett formula, what assurances can he give to the chairmen of health trusts in Scotland?

Mr. Galbraith: Expenditure on the health service in Scotland is well laid out in our plans, and that will continue. The funding of the health service in Scotland is well known and secure.

Health Boards (Funding)

Mr. Donohoe: To ask the Secretary of State for Scotland when he next expects to discuss financial provision with the chairmen of the health boards. [2337]

Mr. Galbraith: I held the first of my regular meetings with health board chairmen on 6 June 1997.

Mr. Donohoe: Given the commitment by the Labour party in the manifesto to do away with the crazy internal market—and, specifically, given the proposal to halve the number of health board trusts in Scotland—can the Minister tell us whether the two acute trusts in Ayrshire will be axed?

Mr. Galbraith: We have already begun to dismantle the internal market; detailed plans will be set out in a White Paper. We are also considering the merging and reconfiguration of trusts and we are asking boards and trusts for their views. There will be full consultation. Of course the trusts to which my hon. Friend refers will be given consideration.

Mr. Menzies Campbell: As the Minister knows, there are several proposals in various parts of Scotland, not least in Fife, for the amalgamation of national health service trusts. Will he assure the House that the single criterion to be applied before any trusts are allowed to amalgamate will be the enhancement of patient care?

Mr. Galbraith: I can most certainly give the hon. and learned Gentleman that assurance. The main reason for amalgamation will be to improve care for patients in the area. When we have drawn up our plans, they will go out to full consultation before any final decision is made.

Mrs. Fyfe: Has my hon. Friend noticed that Health Care International has applied to have its bed complement reduced from 86 to 50? Remembering the gross waste of taxpayers' money under the previous Government on an unworkable hospital, will he make a statement about the action taken by the Labour Government, after decades of waiting, to get a first-class, up-to-date maternity unit built at the royal infirmary?

Mr. Galbraith: I was pleased to announce yesterday that we have been able to find £31 million of public capital to build the new maternity unit at the Glasgow royal infirmary. I was concerned that the private finance initiative process was delaying the project. The new unit is essential, as Rottenrow, which has served us well for many years, has become out of date. I am extremely pleased that we can now move forward.

Dr. Fox: Health chairmen will understand that money cannot be spent on health without first being raised. The Chief Secretary has refused to rule out prescription charges for some pensioners in England and Wales; will the Minister rule them out in Scotland?

Mr. Galbraith: Our comprehensive spending review is for the medium and long term. Its purpose is to ensure that all public moneys are best used to fulfil our manifesto commitments. As we set out in our manifesto, there is no question of the Government doing anything to breach the


fundamental principle of the NHS: that health care will be available to all according to need and free at the point of use.

NHS Trusts (Management Efficiency)

Mr. Ernie Ross: To ask the Secretary of State for Scotland what plans he has to improve the management efficiency of NHS trusts. [2338]

Mr. Galbraith: The Government are determined to make progress in reducing the costs of managing the national health service. We have made clear our intention to replace the internal market. The details of our proposals will be contained in a White Paper to be published in the autumn. In the meantime, we have already taken action to release £10 million of savings in bureaucracy to reduce waiting lists and deal with emergency admissions, particularly in the winter months.

Mr. Ross: I congratulate my hon. Friend on moving so quickly to meet some of Labour's manifesto commitments. What efforts has he made to halt the creeping privatisation of clinical services in the national health service in Scotland?

Mr. Galbraith: The most important thing to say is that there will never, never be a repeat of the Stonehaven process under this Government. Clinical services will never again go out to the private finance initiative.

Mr. Ian Bruce: The Government are trying to save £100 million in the health service by cutting managers and clerical workers. How many will have to be sacked to achieve that saving?

Mr. Galbraith: The hon. Gentleman is talking about the NHS throughout the United Kingdom; the equivalent figure for Scotland, for which I have responsibility, is £10 million. We have already made it clear that if there are to be any job losses we hope that they will happen through natural wastage, voluntary redundancy or early retirement.

Mr. David Marshall: I congratulate my hon. Friend on his splendid announcement yesterday about the financing of the new maternity unit at Glasgow royal infirmary, which brings to an end 18 years of wrangling and inefficiency. Does he realise how welcome it is to people in the east end of Glasgow? How soon does he expect construction work to commence and how long will it take to complete the unit?

Mr. Galbraith: I want, first, to recognise the considerable effort that my hon. Friend has put into the project, fighting for his constituents in the east end of Glasgow. That is why I was especially happy to make the announcement. I hope that work will start extremely soon. The first patients will be admitted in 2000 and I hope to open the unit then.

Economic Development

Mr. Salmond: To ask the Secretary of State for Scotland when he will next meet Scottish Enterprise to discuss measures to encourage economic development. [2339]

Mr. Wilson: My right hon. Friend and I intend to have regular contact with Scottish Enterprise. We met members of the Scottish Enterprise board on 6 June at the local enterprise company board members conference in Dundee. Yesterday, I had a very useful session with the chief executive and senior management team of Scottish Enterprise in Glasgow.

Mr. Salmond: At such meetings, will the Minister discuss the impact on economic development around the coastline of Scotland if the capacity reductions in the fishing industry fall on the Scottish fishing fleet as opposed to the flags of convenience fleet? Does the Minister accept that the proposed deal emerging from the intergovernmental conference falls far short of what is required to deal with the flags of convenience problem and of the Prime Minister's commitments to the Scottish Fishermen's Federation before the election? What was the Scottish Office input into the IGC relating to flags of convenience? What is the Scottish Office position on the matter?

Mr. Wilson: I imagine that when we discuss fishery matters with Scottish Enterprise, the acting chairman in particular will be well informed on them. As far as present negotiations are concerned, we should wait and see whether anything comes out of the IGC. I assure the hon. Gentleman that my colleague the Minister with responsibility for fisheries has been deeply involved in the discussions.

Mr. Eric Clarke: May I ask my hon. Friend about future investment in Monktonhall colliery in my constituency? The men invested £10,000 of their money to keep the colliery open. The Coal Authority has now put it into care and maintenance. I thank my hon. Friend and his Department, as well as the Minister at the Department of Trade and Industry, for their efforts, but the colliery is reaching its 11th hour. Has anyone come along and agreed to keep it open? Three hundred and twenty jobs are at stake in my constituency and the constituencies of other hon. Members in the area and it would be a great loss if Monktonhall colliery were to close.

Mr. Wilson: I share the sentiments that my hon. Friend expressed. As he was good enough to recognise, we have put a lot of work into the matter during the past few weeks. As he knows, I have had a couple of meetings with him and representatives of the National Union of Mineworkers. We managed to extend the deadline for the switching off of the pumps. The situation is very regrettable. A great deal of investment went into Monktonhall and the flooding has clearly come as a devastating blow to the people who work there. My hon. Friend said that we are at the 11th hour—we are well into it. The problem is that in spite of the efforts that we initiated as a result of our meeting with him—to scan the world looking for


anyone who was interested in taking over or investing in Monktonhall—we have had no response. There remains only one interested party. I met that party last Friday. There are real problems with the financing arrangements that he is able to produce, as my hon. Friend knows. In all seriousness, we must make progress soon if this saga is to have anything less than a sad conclusion. It is costing £100,000 a week to keep the pumps going. A case can be made for that if there is a serious expression of interest, but if one looks around the world and finds no one who is interested, obviously a conclusion has to be reached at some point.

Roads Programme

Mr. Alasdair Morgan: To ask the Secretary of State for Scotland what plans he has to review the present proposals to upgrade the A75 and A76 roads. [2340]

Mr. Chisholm: I shall announce in the near future our plans for fulfilling our manifesto commitment to a strategic review of the Scottish trunk roads programme as a whole. The A75 and A76 roads will be considered within that context.

Mr. Morgan: Does the Minister realise how disappointed my constituents will be with that reply, both on the ground of road safety—there have already been several serious accidents on both roads this year—and on economic grounds because of the poor transport infrastructure in Galloway? Does he also realise that the Government's commitment to dual the A55 in Anglesey, which the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain) reaffirmed last week, will drag transport away from the Stranraer-Larne route and will cause further redundancies in Stranraer and Northern Ireland unless roads are also built in Galloway?

Mr. Chisholm: As I have said, safety will be a key criterion in the roads review that we will announce later this week. There is a route action plan for the A76 and one to examine the entire length of the A75 is planned. Finally and perhaps most important, a £10 million scheme for the area known as the Glen, which lies immediately to the west of Dumfries, will start in spring 1998.

Public Expenditure

Mr. Fallon: To ask the Secretary of State for Scotland if the Barnett formula will continue to operate for the allocation of public expenditure in Scotland. [2341]

Mr. Dewar: The Barnett formula is well established, giving stability and certainty to Scottish Office expenditure plans. The White Paper on devolution will set out the position clearly and, as my right hon. Friend the Chief Secretary to the Treasury made clear in the House on 11 June, the Government believe that the formula plays a very important part in the allocation of public expenditure.

Mr. Fallon: Will the Secretary of State confirm that if the new Scottish Parliament voted to lower taxes, it would, perversely, increase the proportion of expenditure

in Scotland paid for by non-Scottish taxpayers? Does he really suggest that the Barnett formula can continue unamended?

Mr. Dewar: I do not accept the hon. Gentleman's argument. There will clearly be an extensive debate on the matter after publication of the White Paper. I welcome that, because I believe that the case is very strong. A good system will be in the White Paper and I hope that it will command support both north and south of the border.

Constituency Sizes

Mr. Nicholas Winterton: To ask the Secretary of State for Scotland if he will make a statement on the average number of voters in a Scottish constituency. [2342]

Mr. McLeish: The average size of the parliamentary electorate in Scottish constituencies, based on the 1997 electoral register, is 55,339.

Mr. Winterton: I am grateful to the Minister for his answer. I represent an English constituency with about 72,000 electors. Does he believe that such inequality between the sizes of constituencies in Scotland and England can remain? As a matter of urgency, will he ask the boundary commission to start its work in Scotland to bring the size of Scottish constituencies into line with that of those in other parts of the United Kingdom?

Mr. McLeish: I do not accept the hon. Gentleman's comments. Scotland's entitlement to not less than 71 seats has been in place since 1948 and successive Governments of all persuasions have endorsed the provision currently contained in schedule 2 to the Parliamentary Constituencies Act 1986. There has never been an equivalent provision for England.

Oral Answers to Questions — HOUSE OF COMMONS

Summer Adjournments

Mr. Winnick: To ask the President of the Council if she will make a statement on her plans for the summer Adjournments. [2314]

Mr. Gapes: To ask the President of the Council what plans she has to reduce the length of the summer Adjournment and to ensure that periodic Adjournments introduced coincide with school holidays. [2317]

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): I am in favour of our periodic Adjournments, including the summer Adjournment, coinciding with school holidays whenever possible. I regret that I am not yet in a position to give an indication of the Government's intention with respect to this year's summer Adjournment, but I am mindful of hon. Members' views and of the representations that have been made. In general terms, the arrangement for the summer and other Adjournments is one aspect of our working practices that the new Select Committee on Modernisation of the House of Commons may wish to consider.

Mr. Winnick: I appreciate my right hon. Friend's answer. Is it appropriate for the House not to sit for three


continuous months? While, for Labour Members at least, it is not one long holiday, it seems a long period for Parliament to be in abeyance. Does she accept that many people find it strange that while we continue to sit until late at night, despite what happened in the last Parliament, we shut up shop for three months? Is it really necessary?

Mrs. Taylor: I can give my hon. Friend no assurance that the summer recess will be the three months that he suggests. The House will agree that recesses are not holidays for Members of Parliament. I think that further progress could be made on the structure of the parliamentary year, but the modernisation Committee may wish to consider that.

Mr. Gapes: I welcome my right hon. Friend's remarks about trying as far as possible to ensure that recess dates correspond with school holidays. School holidays are different in Northern Ireland, Scotland and England and Wales. To be fair to all hon. Members, it would be better to reduce the length of the summer recess to provide hon. Members who have children with the opportunity to see our families. This should be a family-friendly Parliament.

Mrs. Taylor: I am sympathetic to my hon. Friend's point and fully aware of the difficulties of getting recess dates that coincide with holidays in all the different parts of the country. It is impossible to guarantee that hon. Members will always be in recess during school holidays, but I think that more could be done to ensure that the two coincide.

Mr. Tyler: Does the President accept that the summer recess will provide the first and best opportunity for us to rationalise the seating in the Chamber? At present there are absurd anomalies, not just relating to the large number on the Government Benches. Is this not the first and best opportunity for us to bring in the carpenters and electricians?
Should not anomalies such as we witnessed this afternoon, when Conservative spokesmen found it necessary to put Prayers cards on their Front Bench to try to establish some right to speak on behalf of Scotland, also be addressed as a matter of urgency?

Mrs. Taylor: I will not comment on who put down Prayers cards first in any particular row in the Chamber. As for the work that could be done in the summer recess, I do not think that it would be possible for the House to arrive at any conclusions about alterations, even if alterations were thought possible. We are a long way from any consensus that the shape of the Chamber should be changed.

Mr. MacKay: Will the right hon. Lady confirm that, owing to the Government's delay in introducing the Budget and the consequent Finance Bill—apparently because of fears of litigation over the windfall tax—the current parliamentary term will extend further into the school holidays than would have been necessary if the Government had only been competent?

Mrs. Taylor: Labour Members will take no lectures from Opposition Members about competence or, indeed, business management.

Child Care

Mrs. Clwyd: To ask the right hon. Member representing the House of Commons Commission if she will make a statement on child care arrangements for Members and staff in the House. [2315]

Mrs. Ann Taylor: On this occasion—although it will not be the normal practice at subsequent Question Times—I am answering for the House of Commons Commission.
A scheme exists for staff employed by the Commission. Participants receive child care vouchers. The scheme caters for children under five and vouchers may be exchanged for a range of child care facilities. No arrangements are made by the House for the children of Members.

Mrs. Clwyd: I am grateful for that answer, but question what my right hon. Friend said about child care vouchers. Welcome though they are, they have been at the same level for several years—£6 a day—and I believe that that ought to be increased.
More than 5,000 people work in the Houses of Parliament. Is it not time that child care facilities were provided? In any comparable organisation, they would be. It has taken us 13 years to get a unisex hairdresser in the House; surely it is not going to take as long as that to secure very necessary child care facilities.

Mrs. Taylor: We should all be aware of the need for good child care facilities for all parents. Many people would say that child care facilities in the House might not be the best option for a number of people who work in the Palace. The matter has been considered by Committees of the House in the past, and it may be considered by them in the future.

Mr. Barnes: To ask the President of the Council what representations she has received regarding the provision of a creche and child care allowances for hon. Members and their staff; and if she will make a statement. [2316]

Mrs. Ann Taylor: I have received two letters, one signed by several Members, about the possibility of establishing a creche. During the last Parliament, the Administration Committee considered the need for a scheme for Members, and concluded at that stage that there was little demand for it. Clearly the Committee could consider the matter again, although I think it right to remind my hon. Friend that, as each Member has his or her individual working pattern and family arrangements, it is difficult to see one simple solution to the problem.

Mr. Barnes: Is my right hon. Friend aware that things have changed in the House? Hon. Members seem to be getting younger and younger—that even applies to party leaders. Because of that, there is presumably more interest in creche and nursery facilities, as well as that felt by the 5,000 people mentioned by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd). Today, a parliamentary child care group was established by trade unionists and others in the House. May I press my right hon. Friend to say that the surveys that have been conducted in the past


should now be extended to take account of the entirely new circumstances, and to establish the demand that exists so that it can be met?

Mrs. Taylor: It is highly possible that the Committees, once they are established, will want to reconsider the situation in view of the opinions of the House as it is now constituted. I agree with my hon. Friend that there are more younger Members and that there may be more interest in creche facilities. I should point out, however, that many Members who are not London based would not be interested in using a creche for their children.

Mrs. Ann Winterton: If arrangements are made in due course for creche and other facilities in the House, will the right hon. Lady ensure that the costs do not fall upon the taxpayer but entirely upon those who use such facilities?

Mrs. Taylor: The cost of such facilities, were they to be provided within the House, would be a significant factor. As for our responsibilities as the Commission, the child care vouchers that are provided to staff are paid for by the House. I have no plans to introduce subsidies to hon. Members for child care facilities.

Public Access

Mr. Corbyn: To ask the right hon. Member representing the House of Commons Commission what proposals the Commission has for improving public access to the Palace of Westminster. [2318]

Mrs. Ann Taylor: The Commission remains committed to making the Palace of Westminster accessible to people with disabilities. Since 1995, in excess of £1 million has been spent in implementing the conclusions of the Administration Committee's review of access for disabled people. I will arrange for a list of the recent improvements that have been undertaken to be published in the Official Report.

Mr. Corbyn: I am grateful to my right hon. Friend for making that list available to hon. Members and the public. Does she accept, however, that throughout the previous Parliament, and several before that, constant concern was expressed about the difficulties of access by the public to this building, particularly through St. Stephen's entrance, because the large number of steps there mean that wheelchair users have to come into the House through a back route? Will she make it a priority to ensure that all visitors to the building are able to enter it in exactly the same way so that they do not feel a sense of discrimination and exclusion? If we are able to provide proper access facilities when the House is lobbied by disability organisations, we should be able to provide them every day.

Mrs. Taylor: My hon. Friend will be aware that there are particular difficulties associated with the St. Stephen's entrance and that several feasibility studies have been undertaken to see what could be done, but those difficulties are quite severe. Progress has been made in a number of areas and I know that the Serjeant at Arms is having further consultations with those involved and is

now conducting trials to see what improvements could be made for people with disabilities and others who wish to enter the House of Commons.

Mr. Peter Bottomley: The progressive steps that have been taken, which have certainly made life much easier for those with disabilities, are welcome. Further efforts would be supported to overcome some of the remaining challenges, which are great. Could the Commission consider another unsatisfactory situation—the queues of people outside the Palace who wait for hours, often in the rain, with the uncertain prospect of coming into the House? They have no opportunity either to watch the proceedings in the House on television or to listen to them. I am aware that there may not be a short-term answer, but could the right hon. Lady give some consideration to that problem?

Mrs. Taylor: I am grateful to the hon. Gentleman for his remarks about the progress that has been made so far to improve access for people with disabilities. As for the queues we see outside, there is a problem because those people often do not know how long they may have to wait. They are sometimes of the opinion that the queue ends as soon as they get inside the door at St. Stephen's, but we know that that is not the case. I will consider the point that the hon. Gentleman has made, but I cannot instantly see any easy solution.
Following is the information:
Of particular importance have been the provision of ramps in Star Chamber Court, at the Medals Corridor and at Speaker's House, as well as the installation of platform lifts giving access to the Grand Committee Room and to the disabled lavatory off the Upper Committee Corridor. It is intended to install a lift to the Grand Committee Room as part of the planned redevelopment of the Westminster Hall Cafeteria area, to include a visitor centre, after the new Portcullis House is occupied. This redevelopment will also allow ramped access to the interview rooms off Westminster Hall which are the only public areas not currently accessible to wheelchair users.
Recent improvements to the arrangements for access by the public to the Line of Route have been the provision of a tactile model of the Palace of Westminster in the Robing Room so that people with visual impairments can gain an understanding of the building. A change in the queuing arrangements at Sovereign's Entrance means that it is now possible for a large number of people to wait in shelter until their tour starts.

Taking of the Oath

Mr. Cohen: To ask the President of the Council if she will review the arrangements relating to the taking of the oath by hon. Members. [2319]

Mrs. Ann Taylor: I have no plans to do so.

Mr. Cohen: Does my right hon. Friend agree that the oath needs to be reconsidered because it has nothing to do either with allegiance to the country or to democratic government? The oath seems feudal and to smack of freemasonry. My right hon. Friend will recall that the Tolpuddle martyrs got deported for taking an oath. I am keeping my fingers crossed that my right hon. Friend will agree to review the taking of the oath.

Mrs. Taylor: On this occasion, I cannot agree with my hon. Friend. There may be things we could do to speed


up the process. Changes were made on the last occasion when Members took the oath, following recommendations from the Procedure Committee. Further improvements might be possible, but I do not accept the basic idea behind my hon. Friend's question: that we should either abolish or change significantly the oath itself.

Smoking Policy

Mrs. Anne Campbell: To ask the right hon. Member representing the House of Commons Commission what plans she has to implement a smoking policy for staff working areas. [2320]

Mrs. Ann Taylor: The Commission's policy on smoking for its staff is that individual heads of Department make arrangements by mutual agreement with their staff. The Board of Management is presently carrying out a review of that policy at the specific request

of the House of Commons Commission. A policy on smoking in offices of hon. Members and their staff is primarily a matter for the Administration Committee.

Mrs. Campbell: I welcome the review. Does my right hon. Friend regard it as unsatisfactory that the House of Commons and the associated office buildings are some of the few public buildings in which smoking is still permitted in libraries, corridors and reception areas, and that it is permitted even in the Division Lobbies? Will she try to ensure that the review is speeded up and that we get a smoking policy that applies to the whole of this building and to the offices she mentioned?

Mrs. Taylor: I have a great deal of sympathy with my hon. Friend's point. Although the Committees of the House have looked at this matter in the past, the fact that we have a new Parliament with new Members may mean that this is an opportune time to revisit the issue. Many hon. Members will have a great deal of sympathy with her point of view.

Points of Order

Mr. Alex Salmond: On a point of order, Madam Speaker. Earlier today, on Question 7, you allowed the right hon. Member for Bromley and Chislehurst (Mr. Forth) to ask a question from the Dispatch Box. I understand that there is currently an element of confusion in the Tory party and I know that the right hon. Member might be suffering an identity crisis as to whether he is a Front or Back Bencher—perhaps his prospects depend on the outcome of the leadership contest. However, I do not think that there are any recent precedents—there may be some longer-standing ones—for a question such as that being put from the Dispatch Box. I do not think that it is a good practice, and I hope that you will not allow it in future.

Madam Speaker: There are many recent precedents for such an occurrence. I watched very carefully today. I am given the names of those on the Front Bench who are currently responsible for Question Time—there were four Members on the Front Bench and they were entitled to four questions, including the one asked by the right hon. Member for Bromley and Chislehurst (Mr. Forth), but they took only three. I have no complaints and I do not think that the House could have either.

Mr. Alan Clark: On a point of order, Madam Speaker. You will have heard the Secretary of State for Scotland, in replying to my supplementary question to Question 7, stigmatise an assertion that I made as being fiction. I accept that that was a slip of the tongue, because we all accept that in this House we do not accuse each other of lying, but can it be put on the record that he said that the item in The Herald, which asserted that the cost of a job at the Hyundai factory in Fife would be £120,000, was a lie?

Madam Speaker: Ministers are responsible to themselves for the comments that they make, but I doubt whether the right hon. Gentleman actually used those words. I tend to listen very carefully to what is said in such heated exchanges.

Mr. Ian Bruce: On a point of order, Madam Speaker. Some time ago, the Labour party issued rules of conduct to its Back Benchers on how they should conduct themselves in this House. It struck me that those rules actually stopped them from holding their own executive to account if it seemed that they were being critical of the Government. I saw you looking round for Labour Members standing during questions about expenditure on Scottish matters, so you will have noticed that no Labour Member stood on those questions. Will you look at those rules of conduct and perhaps send them to the Nolan committee, and so make sure that the Labour Whips have not gagged all Labour Members?

Madam Speaker: Those are party political matters in which I certainly have no intention of intervening, whether they involve the Labour party or any other party in the House. I have been in this Chair for just over five years now, and there were times when a previous Government had no Members of their own party standing and I was at a loss in terms of calling Members to speak. It is quid pro quo.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(4) (Standing Committees on Delegated Legislation),

BENEFITS

That the Housing Benefit and Council Tax Benefit (General) Amendment Regulations 1997 (S.I., 1997, No. 852) be referred to a Standing Committee on Delegated Legislation.—[Mr. Graham Allen.]

Question agreed to.

Orders of the Day — Local Government Finance (Supplementary Credit Approvals) Bill

Order for Second Reading read.

The Minister of State, Department of the Environment, Transport and the Regions (Ms Hilary Armstrong): I beg to move, That the Bill be now read a Second time.
In our manifesto, we stated our long-held commitment to help meet housing need by building new houses and rehabilitating old ones, through the phased release of capital receipts from council house sales. We shall now honour that commitment.
There is a good reason why we made that commitment. Since 1979, more than £22 billion has been raised from sales of council housing, a policy which has enabled many people to realise their dream of owning their own home. But where did the money go? How did the Government use that extremely valuable asset? Very little of it went back into housing. Now we want to make sure that some of the money is put back into housing, so that tenants and homeless families can know that they, too, may benefit from the opportunities that a decent home brings.
This Government were elected on a promise to govern for the many, not just for the few. We shall not forget those who were left behind by an Administration who lacked a housing policy and ensured that many of those folk simply never had a chance.
The need to spend more on housing is clear. During the previous Parliament, there were successive cuts to housing capital programmes. Local authorities in particular have suffered as allocations under the housing investment programme, for investment in both public and private housing, have been cut from more than £1.7 billion in 1991–92 to less than £900 million this year.
Those cuts to local authority resources have had a major effect on council housing stock. Tenants have to live in properties that often lack adequate kitchens and bathrooms; doors, windows and roofs are not being replaced until long after they have reached the end of their useful lives. Local authorities have to patch and mend instead of undertaking long-lasting repairs and improvements.
That is a waste of scarce resources. Last year, local authorities estimated that the backlog of work needed to bring the stock up to a reasonable state of repair was £20 billion. Obviously, that is a local authority estimate, not ours, and it needs to be treated with some caution. But none of us can deny that the decline in resources over a number of years has resulted in the deterioration of much local authority housing stock.

Mr. William O'Brien: What my hon. Friend is saying about the provision of new housing and improvements to old housing in local authority stock is most welcome. Will she also bear in mind the question of rents? Under the Tory Government, private housing and housing associations had to ratchet up rents in line with the Government's philosophy. What we want is affordable

local authority housing. I am sure that my hon. Friend will facilitate that; will she give local authorities the right to provide affordable houses for their tenants?

Ms Armstrong: That is one of the several real difficulties that the former Administration left us, but I can assure my hon. Friend that we shall bear it in mind, and that this initiative—contrary to the claims of some Conservative Members—will not lead to the raising of rents. [Interruption.] Madam Speaker, you have taught me that I must not respond to sedentary interventions.

Several hon. Members: rose—

Ms Armstrong: I give way to the right hon. Member for Skipton and Ripon (Mr. Curry).

Mr. David Curry: Will the hon. Lady extrapolate her remarks to council tax?

Ms Armstrong: I am happy to do so. There will be no effect on council tax because, as I shall explain, the supplementary credit approval route enables us to ensure that we account for the additional capital spending in the usual way. Housing-related spending will be accounted for through the housing revenue account, and non-housing spending will be accounted for through the capital element in the standard spending assessment; so there will be no effect on council tax or on rents.

Mr. John Maples: I do not follow that, because it seems to me that a large amount of that £22 billion is on deposit, earning interest. If the capital is spent, that interest is no longer available to the council and so will have to be made up by council tax payers. Will the Minister explain why that is not so?

Ms Armstrong: It will help the hon. Gentleman if he listens to my speech. If, at the end, he has not understood, I shall give way to him again. The matter will be explained; I accept that it is complex.
Not only local authority housing programmes have been cut. The Housing Corporation approved development programme, which is the main means by which social housing has been provided in recent years—new social housing, at least—was £1.6 billion in 1992 and well over £2 billion the following year, but it will be down to £560 million by the end of the century. That has severely affected new provision.
Last month, I announced plans to change the criteria according to which local authorities draw up their housing allocation schemes, to ensure that reasonable preference is given to the needs of households owed a homelessness duty, but improving the safety net for homeless families addresses only the symptoms of the problem, not its causes. In many parts of the country, one of the underlying reasons for homelessness is simply the shortage of good-quality, affordable accommodation. Those problems need to be tackled and the Bill is the starting point for a capital receipts initiative that will begin to do so.

Mr. Eric Pickles: On the subject of affordability, does the hon. Lady agree with Shelter's assessment that releasing capital receipts will increase rents by £6 a week?

Ms Armstrong: I have tried to suggest that this is a complex matter and that perhaps Opposition Members


should wait until they have begun to grasp a little better the way in which the initiative will work, but I do not agree with the hon. Gentleman. As my speech progresses, he will understand why it is unnecessary for council house rents to increase and why we would not allow rents to increase by such an amount as a result of the Bill.
The Bill is not just about providing additional resources. Given the scale of the problems that we have inherited, it is vital that those funds are not wasted. We must ensure that the additional spending goes where it is needed most, that it works within the Government's housing policy and wider policy framework and—this is important—that spending is used economically, efficiently and effectively in support of those objects.
We also need to proceed at a pace that meets the demands of prudent financial management and recognises the capacity of the construction industry. That will mean phasing the release of additional spending over time. With my right hon. Friend the Chancellor of the Exchequer, I shall consider the scale and pace of the additional spending that we shall provide under the initiative. An announcement will be made in the summer Budget about resources for 1997–98 and for 1998–99.
The complexities of the matter are encompassed in clause 1, which will enable us to honour our manifesto commitment. It relates to section 55(3) of the Local Government and Housing Act 1989, which states that set-aside capital receipts cannot be taken into account when determining the amount of a credit approval. The Bill will remove that prohibition for supplementary credit approvals, enabling us to issue them in a way that takes account of set-aside receipts. We intend to issue supplementary credit approvals rather than release the set-aside receipts.
That is a far superior mechanism, because it will enable us to direct the significant resources available to the areas where need for investment in housing is greatest. It is fairer because it does not reward local authorities that have chosen to retain their receipts while penalising those that have used them to repay debt.
There appear to be some major misconceptions about local authority receipts and how supplementary credit approvals could be used to take set-aside receipts into account. I shall therefore explain that matter in more detail. It is clearly necessary to do so, given the interventions so far.
Under the capital finance rules, local authorities with outstanding debt are required to set aside 75 per cent. of receipts from council house sales and 50 per cent. of receipts from the sale of land and other assets. Exceptions to that rule have been made to encourage the sale of particular assets, but there has usually been a requirement to set aside part of the receipt. Amounts set aside are recorded in an authority's accounts as provision for credit liabilities, or PCLs. The sum set aside can be used to repay debt or to support capital expenditure when facilitated by a credit approval, or simply held as cash for investment.
Thus, two neighbouring authorities may have generated the same level of receipts over the past few years, but now have a very different so-called PCL balance, simply because one has paid off more debt or used the resources in lieu of borrowing. For example, Birmingham has set aside capital receipts of more than £100 million since 1990, but it now looks as if it has nothing because its

PCL balance is zero. Enfield, on the other hand, has set aside £26 million in the same period, but has a PCL balance of £163 million.
Another complication—I am sorry about this—is that those balances are not necessarily an accurate reflection of the level of cash and investments held by an authority. Local authorities might not have money in the bank. Enfield, for example, has cash and investments of only £7 million, although its PCL balance is £163 million. We therefore propose to take into account the cumulative total of receipts set aside by each authority since 1990, not the actual levels set aside at any one time. That is fairer as it does not take into account individual authorities' perfectly proper variation in debt management practices. It is one reason for issuing supplementary credit approvals as a means of releasing set-aside receipts.
The second reason for using the supplementary credit approval route, however, concerns the distribution of receipts. Local authorities that have generated the most receipts over the past six years are not necessarily those with the greatest need. We therefore want to strike a balance between the cumulative total of receipts set aside by individual local authorities and the relative need of each local authority. Issuing supplementary credit approvals allows us to do that. We therefore propose that, when resources are distributed among individual local authorities, one third should be distributed according to the proportion of the total of eligible set-aside receipts and the remaining two thirds in accordance with assessed need. That will be further explained in the consultation paper that we shall issue shortly. We shall be interested to hear views on our proposals.
Let me clear up another misconception. The Bill is about additional money. We have always accepted that the release of capital receipts will increase public expenditure. We shall therefore need to phase spending carefully, to ensure that it meets our manifesto commitment to prudent economic management—another good reason for using supplementary credit approvals.

Ms Margaret Moran: Does my hon. Friend agree that the Bill will benefit not only the 4,700 families who are homeless and on housing waiting lists in my constituency, but the economy and employment opportunities by potentially creating 30,000 jobs nationally for every £1 billion spent in each of two years? As more than half of that cost could be recouped through tax and benefit savings over that period, does she agree that that is far more prudent than the economic mismanagement of the previous Government, who allowed housing investment to be slashed by more than half and housing benefit costs to quadruple?

Ms Armstrong: My hon. Friend comes to the House with much experience in housing matters, and she is right that this initiative enables us to tackle other priorities identified in our manifesto. The initiative also meets my right hon. Friend the Chancellor's golden rule that borrowing must be used for investment, as my hon. Friend said.

Mr. Curry: Will the hon. Lady help the House, via me, by providing further clarification? I want her to imagine that she has round her table representatives of three local authorities: one that is relatively rich in capital receipts, one that is not, such as Tower Hamlets or Hackney—I


appreciate the distinction between the categories of capital receipts—and a large-scale voluntary transfer authority, such as Bromley. When those representatives come along and ask her what they will get, how will the hon. Lady explain the allocation to each category and how it is calculated?

Ms Armstrong: I shall try to help the right hon. Gentleman, whom I welcome to the Chamber. I thought that he might be otherwise preoccupied.
I had not explained, because I thought that matters were getting too complex, that at this stage we are not taking LSVT receipts into account. Bromley will be treated like other local authorities, except that, because it has got rid of all its housing stock, it will not have the same level of need as elsewhere—[Interruption.] No, Bromley does not have the level of need that other authorities have, because it does not have its own stock to improve. There may well be some need, but not the level of need that will exist in other authorities. The position will also depend on a local authority's current debt level. If it is debt free, it will be able to spend receipts, as the right hon. Gentleman knows.

Mr. Curry: I do not want to be difficult, but the point is important. The hon. Lady emphasised that in some respects she would allocate according to need. She then said that because Bromley had transferred its housing stock, it would not have need as a local authority. However, the people of Bromley have their needs. How will she take account of that in her distribution of credit approvals?

Ms Armstrong: Bromley does not have the same level of need because it does not have housing stock to improve. We shall use the same indicators of need as the right hon. Gentleman's Administration used when assessing the housing investment programme. The same indicators of need that are currently used for other housing programmes will be used for this programme. We intend that two thirds of the money should be allocated according to need and one third according to historic receipts. We are, however, prepared to listen to representations about the balance. I hope that that answer has helped the right hon. Gentleman.

Mr. Dennis Skinner: I have listened carefully to my hon. Friend talking about the way in which there will be a redistribution of the money available. Does she accept that one of the reasons why the right hon. Member for Skipton and Ripon (Mr. Curry) and Tory Members are a little confused about need and think that the redistribution is complex is simply that they operated for so long on the basis of handing out money to authorities that, in many cases, did not need it? The right hon. Gentleman made a great error when he referred to three local authorities being round the table. He forgot to mention Westminster, which got it all.

Ms Armstrong: My hon. Friend tempts me down another route which, if he does not mind, I will not be driven down today.

Sir Paul Beresford: Will the hon. Lady give way?

Ms Armstrong: No, because I am anxious to make progress. I have taken a lot of interventions and I know that many hon. Members want to make speeches.
I want to move on to how we see the money being spent. We do not see the initiative as simply delivering a long-standing promise to housing authorities. It is also an excellent means of attacking economic and social decline, although we expect to see a major impact on housing over the life of this Parliament. We shall consult local government associations and local authorities about how best to target resources where they are needed and how to ensure that additional spending supports housing and wider objectives.
I can outline the main principles now. Local authorities will have a key role to play. They are responsible for drawing up housing strategies that cover all the housing in their areas. I want to ensure that they integrate the additional spending into those housing strategies. That may mean planning to undertake long-delayed renovation work to their old stock where that is their local priority or it may mean working in partnership with registered social landlords to provide new homes. It may mean expanding their private sector renewal programme and giving new momentum to renewal area initiatives. It may mean supporting the transfer of local authority stock to registered social landlords where that is supported by the tenants. The key will be to ensure that the resources are targeted to meet areas of local concern and to achieve good value for money.

Sir Paul Beresford: Will the Minister give way?

Ms Armstrong: It would be very rude of me not to give way to a former Minister.

Sir Paul Beresford: I am delighted. As an ethnic minority immigrant and as the product of a comprehensive education system, I have not been able to follow the hon. Lady completely. Is she saying that local authorities selected by the Secretary of State will be able to borrow money through supplementary credit approvals, taking into account the set-aside capital receipts received since 1990, but not taking into account the receipts of neighbouring authorities? Will that apply both when local authorities hold capital receipts and when they have used them to repay debts?
I should like to ask a second question as this may be my only opportunity to do so. Will the Government pick up the revenue aspects of that scenario in its entirety?

Ms Armstrong: Yes to both questions. The hon. Gentleman has just about got there on his first question. The answer to his second question is yes. If he bears with me to the end of my speech, he will understand our proposals.

Sir Paul Beresford: Will the hon. Lady give way?

Ms Armstrong: No, because I need to move on.
It is a key lesson of recent years that housing investment cannot solve problems where it operates in isolation. Poorly conceived housing schemes, without regard to context, just store up further problems. If housing is seen as part of a wider framework of social support and economic development, the whole can be greater than the sum of the parts. Without that approach, the individual parts can become worthless.
No organisation can have all the answers, and the right answer will vary from place to place. We need an approach based on partnership and pluralism, involving


central Government, local authorities, local communities, local businesses, voluntary agencies and private funders. We need local ideas and an understanding of local needs. The housing problems that I see in my constituency could not be more different from those that I see in London, but there are problems in both areas that need attention from local organisations.
The capital receipts initiative will release resources to allow us to make a start on the problems that we face. The reduction in capital spending on housing since 1990, which I mentioned earlier, has left a substantial hole which we have to start filling. Given the backlog of renovation work needed in local authority housing and the need for new social housing, there is no prospect of financing everything that needs doing from public funds. It is vital that every pound of public sector money is worked as hard as possible and that we find ways of mobilising private finance effectively.
There is a key role for registered social landlords. That includes established housing associations, with their strong recent track record of delivering cost-effective development with a combination of grant and private sector funding. It also includes the new local housing companies, which the Under-Secretary of State, my hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), did so much to promote and which offer a vehicle for the transfer of local authority stock.
I do not expect revolution. Revolutionary approaches to housing have almost always ended in tears. I spent much of my early years as a community worker dealing with some of those early mistakes. I want an evolution of the best elements of policy in recent years, operated in a way that is sensitive to local needs and to the needs and wishes of tenants. That means listening.
The key to success is partnership. I want each local authority to sit down with all its partners to work out how to make the best of what is available. That will involve promoting new developments with housing associations.

Mr. William Cash: Will the hon. Lady give way?

Ms Armstrong: No, I am sorry. I have already taken too long.
We shall not take the approach of the previous Government, who tried to force all local authorities to privatise their stock, regardless of whether they wanted to. However, transfer to another social landlord remains an option. We shall not support transfers of stock if tenants do not want it or if it will never provide the good-quality homes that they deserve—that would be throwing good money after bad—but transfer can bring better housing conditions for tenants more quickly than any other route. A new landlord can make proper provision for the future, preventing the chronic under-investment that we have seen in the local authority sector in recent years.
The emphasis on partnership and working through others may in many cases result in the local authority taking a more strategic role. That is the key. Whatever is happening, the authority has the responsibility to take a strategic approach. I shall ask the Housing Corporation to develop its existing approach by working alongside local authorities so that its knowledge, expertise and proven

ability to promote cost-effective development can be brought to bear on a wider range of problems, but the local authorities' expertise will also come into play.
The initiative is not just about housing. Housing plays an important role in the regeneration of deprived, rundown areas, so we want local authorities to be able to support housing-associated regeneration projects that will help to contribute to the establishment and maintenance of successful communities. We are also determined that the receipts initiative should complement our wider policy objectives—welfare to work and addressing social exclusion. We want to support schemes that provide training opportunities, help the unemployed and support financial independence.
The capital receipts initiative will provide extra leverage to address the needs of individuals and communities. We aim to carry out not just physical regeneration, although that is important, but social regeneration, helping to improve the social environment and to restore people's sense of identity and pride in their communities.
Housing regeneration schemes can include community facilities such as day centres for the elderly, recreation and child care facilities, anti-crime and vandalism measures, energy efficiency schemes and projects to landscape local eyesores. In short, they should improve the quality of life for local people and reinforce the value of housing improvements. We are therefore prepared to allow some 15 per cent. of housing capital receipts in each scheme to be devoted to non-housing projects, provided that those projects directly benefit local inhabitants.
How can we make sure that all that is achieved and that the money is put to good use and not wasted, as it was in some high-profile schemes in the past? We propose not simply to hand over the resources and leave people to get on with it, but to distribute supplementary credit approvals on the basis of one third according to historic receipts and the remaining two thirds in accordance with assessed needs. There will be more to it, however, especially in future years. We shall expect local authorities to monitor their expenditure carefully, so that they can confirm that the money is being well spent—they will receive help from Government officers, including the Audit Commission. If they cannot do so, their future allocations will be reduced.
We shall expect local authorities to set out exactly the improvements that they plan to achieve with the additional resources before they start work on them. They will be expected to demonstrate that the improvements represent good value for money and to show how wider policy objectives, nationally and locally, have been met. To do that, they will have to show how specific outputs enable them to meet the aims and objectives in their housing strategies.
For the current year and for 1998–99, we shall need to issue resources quickly to enable local authorities to plan expenditure sensibly. Thus, local authorities that have plans in place to meet their stated objectives will receive supplementary credit approvals, but we shall expect them to provide us with plans detailing programmes and outputs and we shall monitor them carefully to ensure that the money is used in accordance with those plans.
As the resources are additional to existing housing capital allocations, we shall expect them to be used for additional expenditure. In future years, past performance


will be taken into account in the allocation of resources. There is no point in allocating extra resources if local authorities do not make good use of them. I expect all authorities to improve their performance and to achieve much more for the benefit of their tenants and residents.
Let me remind hon. Members why the Bill is so important. The money issued under the receipts initiative is in addition to current expenditure plans. We are making an important commitment to local authorities and we want to make sure that it makes a difference, not just in the short term. We want to achieve lasting change.
Before I conclude, let me say a few words about clause 2 of the Bill, which amends section 54(5) of the Local Government and Housing Act 1989. The Secretary of State can direct that certain items of an authority's revenue expenditure be treated as capital expenditure, for example when an authority is faced with substantial redundancy costs that it cannot reasonably be expected to meet out of its revenue budget. Currently, the Secretary of State is obliged to impose a repayment period of no longer than seven years when issuing a credit approval to permit borrowing to finance capitalised expenditure. That means that authorities must make provision from revenue resources to repay loans in respect of capitalised expenditure in seven years or fewer. That is a tough requirement and replaces the usual arrangements, which allow repayment over a period in excess of 25 years.
It is right that Ministers should be able to regulate the rate of provision for repaying borrowing for non-capital items. Borrowing for revenue purposes should be seen as an exceptional practice. Giving additional credit approvals to make it possible is a significant concession. It may therefore be reasonable to insist that, in some cases, provision for repaying such borrowing is made at a faster rate than normal. The present obligation is simply too inflexible.

Sir Paul Beresford: Will the hon. Lady give way?

Ms Armstrong: No, I shall not.
The clause will therefore replace the obligation to specify a period for repayment with a discretion to do so, enabling Ministers to take better account of particular circumstances.

Sir Paul Beresford: Will the hon. Lady give way on that point?

Ms Armstrong: I shall not give way, because I want to conclude.
Clause 1 is at the heart of the initiative, and I should remind hon. Members why it is so important. For too many years, social housing has been the poor relation, starved of investment while its assets were sold off. The results of that policy are clear. People are condemned to live in damp and unhealthy housing—a cost in personal terms and to the health service. People are living on estates that most of us would rather not visit—but the police frequently do. Vulnerable families are crowded into tiny flats where there is nowhere for the kids to do their homework. It is no wonder that they fail at school. People are excluded from a basic right: a decent home.
With the Bill, we shall start to reverse the years of decline. We shall enable local authorities, working in partnership with all housing providers and with tenants and residents, to put in place programmes to redress the problems. We cannot turn back the clock; we cannot change it all in a day; but we shall make a difference.

Mr. David Curry: I welcome the Minister of State, Department of the Environment, Transport and the Regions, the hon. Member for North-West Durham (Ms Armstrong) to her post for her first full-scale performance. I had hoped that she would come in the guise of Salome and gradually remove the veils from the Bill. She has shown a few petticoats, but we need to find out a lot more if we are to get to the heart of the measure. Her speech consisted, as far as I could tell, of a quite remarkable transition from introduction to peroration, with almost nothing between the two. We should like a great deal more detail. We will clearly have to explore it in Committee—assuming that the Government, quite exceptionally, intend the Bill to go into Committee.
The Bill is not about capital receipts; it is about giving supplementary credit approvals. The words "capital receipts" are a smokescreen. The Bill is entirely about that nice gentleman at the Department of the Environment, Transport and the Regions dishing out some more conventional borrowing approvals to local authorities.
I agree with the Minister that the area is complex. It is no doubt reminiscent of the Schleswig-Holstein question. I wish her luck in getting abreast of it. All I can say is that once one gets abreast of the question and no longer needs to follow it, one's understanding is difficult to sustain in the face of one's preoccupations.
There are three main components of provisions for credit liabilities. I know that if I do not use that phrase, I will get some retrospective disapprobation from those in the Chamber who are not hon. Members. The first component is the amount set aside from council house sales, the second is the amount set aside from other asset sales, and the third is the amount set aside annually from revenue, representing a fixed percentage of net indebtedness, which is why local authorities such as Birmingham end up with provision not purely from the local authority housing side.
It is worth recalling that the sale of council houses was the most successful privatisation of the entire period of the Tory Government. More than £20 billion was raised by a privatisation which Labour opposed root and branch, stage by stage and week by week. If the privatisation had not happened, we would not be having the debate today.
There is a case for mobilising capital receipts, but it should follow certain clear conditions. The first is that the Government must have the intellectual honesty to recognise that authorising additional borrowing will have financial consequences that will have to be reconciled with the Government's public expenditure commitments. The Government chose to lock themselves into the previous Government's expenditure framework for two years. Whether they were right or wrong to do so, we wish to ensure that they maintain a commitment that they have given repeatedly in the House and outside.
The second condition is that the additional money should be devoted to clearly defined purposes. The Minister of State went very wide in describing


the purposes to which additional money could be devoted and she implied that it could be spent on broader regeneration. We need to know exactly what will be allowed and what the procedures will be for monitoring the expenditure. By the Minister's admission, expenditure on certain schemes has had to be tightened up in the past and we wish to ensure that the conditions are tight from the start.

Sir Paul Beresford: Does my right hon. Friend agree that that point applies especially to clause 2? As it stands, and without the explanation that I sought from the Minister, it appears that an incompetent authority, such as Harlow, which consistently spends some 60 per cent. above its standard spending assessment, could tell the Secretary of State that it was spending over cap yet again and ask whether it could pick up a revenue cost and capitalise it. The local authority could say that it did not want to pay in seven years, but wanted the loan on the never-never. If it kept the capitalisation quiet, the House of Commons would not know, because there is no requirement to report it.

Mr. Curry: My hon. Friend has hit on a pertinent point. When we come to clause 2 in Committee, we will wish to explore such contingencies and possibilities. Whenever somebody tells me that a Bill is a technical measure, I get slightly suspicious about what lies behind it.
There is a good case for devoting the allocation of the credit approvals, which is what we are talking about, to the renovation of existing stock. New build should be done only in partnership with housing associations in order to lever in additional private sector resources. In other words, the money should be used as local authority housing action grant. That has a long-established pedigree and has worked well.
Local authorities should not be told that they can go back to building council houses, except in the case of certain specialist provision. I doubt whether they will, because the right to buy will be a disincentive, but I do not want them to be encouraged to do so.

Mr. Peter L. Pike: Does the right hon. Gentleman accept that the ending of mandatory grant by the previous Government caused major problems for areas that have low-value properties, residents with low incomes and much pre-1914 stock that is in need of major improvement? Does he agree that local authorities should be allowed to spend money on improving such houses, as my hon. Friend the Minister of State suggested, because if one house in a long terrace becomes derelict, it can destroy the whole terrace?

Mr. Curry: I was about to come to the third condition; the hon. Gentleman anticipated me. I have visited the houses in Burnley to which he refers. I was trying to get to Blackburn at the time, but I made an unannounced visit and was able to inspect them in all their glory. There is a good case for using some of the resources to help with private sector renovation. We will all increasingly have to depend on private sector accommodation. That is agreed across the political spectrum.
I have visited areas such as Bradford and seen the problems closely connected with the fate of the ethnic minority communities. We need to ensure that we can

direct money effectively to renovation in those areas. The Labour party has not pledged to reverse the changes in renovation grant and, therefore, we have a common interest in trying to ensure that it is used effectively.
I was pleased to hear the Minister of State say that the resources could also be used to support transfers. Even if all the set-aside receipts were to be mobilized—as if it were available in old socks under the bed and could be poured out into the housing market—they would not match the resources that are required. We will have to mobilise private sector funding, and the best way to do that is by the transfer programme. That programme, which depends on the consent of the tenants—that is written down in the law—is a sensible way forward. I agree with that, but it must be done by consent. The new social landlords, for whom we legislated—the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford) was involved in that—will be an effective way of doing so.

Dr. Brian Iddon: Does the right hon. Gentleman realise that after the Tory Government came to power in 1979, housing benefit escalated from £3 billion to more than £13 billion and is one of the biggest crises in housing? The Tory Government's dogmatic pursuance of market rents and large-scale voluntary transfers caused the problem. He is now advocating that the present Government make that problem worse.

Mr. Curry: As the Government have just said that they intend to continue the policy, I hope that the hon. Gentleman will express his discontent in the proper quarters. If one wants to bring a significant amount of private sector funding into the housing market, one must do so on a basis of realistic rents. Otherwise, the housing associations will not be able to earn the revenues they need to support their activities. That is a plain matter of economic fact.
I do not believe that local authorities should get back into the business of building council houses. We are through that period, and I see local authorities as enabling authorities. It would be an extremely bad use of resources to revert to the previous system.
As far as the fiscal and financial consequences are concerned, many Labour Members have always seen the receipts as being kept in an old sock under the bed, hidden from public view and waiting for some beneficial time to come. They believe that the money is doing nothing, but that is not the case. It does work, in that it replaces borrowing, earns interest and reduces the need for local tax. Therefore, any increase in local taxation would count against the overall public spending programmes.

Mr. Cash: In terms of choice, is not there a great deal to be said for allowing local authorities to make their own decisions as to the extent to which they spend money? Furthermore, that does not apply merely to capping, but to the contents of the Bill. If local authorities had the opportunity to make up their own minds and council taxes thereby increased, would not councils get into difficulties?

Mr. Curry: My hon. Friend is entirely right, but the fact is that local authority expenditure is about


25 per cent. of public expenditure. Despite all the glorious words that may be uttered on this subject, I have yet to be persuaded that any Government are likely to say that they wish not to have a view on what constitutes the correct amount of public expenditure in that regard. My hon. Friend and I will have an opportunity to debate these matters soon when we see the next revenue support grant from the Government. We shall see to what extent they wish to honour their words in that regard.
When the Secretary of State was challenged by my hon. Friend the Member for Stratford-on-Avon (Mr. Maples), he accepted that the receipts generated interest which helped to defray interest on outstanding local government loans or helped to reduce council tax, and that if they were spent, council tax would go up. The right hon. Gentleman said:
Those are the matters of concern that we are discussing with the Chancellor.
Because Labour keeps reverting to its manifesto, he went on:
The constant concerns of Conservative Members are interest payments and money. We are concerned about jobs and houses, and that is the fundamental difference between us.
I credit him with the full quote.
Earlier, in answer to a question from my right hon. Friend the Member for Fylde (Mr. Jack), the Secretary of State had said:
Clearly, the use of those receipts will lead to an increase in public expenditure"—
the Minister of State has accepted that—
and we shall have close discussions with my right hon. Friend the Chancellor of the Exchequer on that matter."—[Offcial Report, 3 June 1997; Vol. 295. c. 171–72]
Rather him than me. Clearly, that will be a very entertaining session, but the matter cannot be swept away like that—although it is very easy to do so. The Chancellor of the Exchequer has his public expenditure forecasts and he has a Labour party manifesto commitment which says:
For the next 2 years Labour will work within the departmental ceilings for spending already announced.
That is the key. If public expenditure is to increase and it is to come off the Department's slate, where will the compensatory savings be made within the Department?
It may be right to increase public expenditure—Ministers would argue that it is necessary—but the House has a right to know how that is to be reconciled with the departmental and Government expenditure plans, especially as the Government are so anxious to show the hair on their chest in the matter of fiscal austerity.

Mr. Pickles: Surely it goes further than that, and Shelter is right to suggest that without substantial subsidies, which Labour Members have said they oppose, rents will rise by £6 a week.

Mr. Curry: I was most interested in the calculations made by Shelter and the Chartered Institute of Housing, and we shall have to explore those issues extremely closely, because mobilising money will have consequences.
Are the new borrowing permissions to be added to the public sector borrowing requirement? Do they affect departmental cash limits? Labour has made a rigid

commitment on cash limits. Will the Government tolerate an increase in PSBR or pretend that it does not matter? If it is real public expenditure, and departmental totals are fixed, where will the compensating cuts be made?
Labour Members have constantly spoken of mobilising capital receipts, as though they were some sort of financial Home Guard to be called out in cases of emergency. In fact, the legislation mobilises absolutely nothing. It does not allow local authorities to spend their receipts; that is the last thing that it does. It does not give councils their money back. It envisages a totally Government-controlled operation.
As far as the naked eye can see, the legislation simply issues wholly conventional supplementary credit approvals. Local authorities can do absolutely zilch unless that nice man the Secretary of State—John, as I suppose he would be called these days—comes along with the permission to borrow.
The legislation leaves a mass of questions unanswered. The Minister did not mention new capital receipts, which are at least £1 billion a year, and I suspect that the departmental estimates are that if set-aside were not to be required in the future, that could be expected to increase public expenditure by up to £2 billion a year. What happens to future capital receipts? Will they simply be locked up, as Labour Members say existing ones are? Are we to use the existing ones back to back, as it were, against credit approvals, while still leaving the new ones locked up?
The Secretary of State has singularly failed, from both sides of the House, to answer that question. What about phasing? When is the process to start? I think that the Minister said that the first tranche would be in this fiscal year. Will it be a five-year programme? Some people are talking about £200 million or £250 million in the first tranche; at that speed, it will take 20 years to honour the pledge to mobilise the £5 billion that has been talked about.
The Minister went some way towards answering the question about the link to regeneration and training. I welcome that link and consider it sensible. She said that local authorities would have to present coherent plans, and I hope that she will insist on that. I hope that she will pay attention to the extent to which such plans are compatible with and will add to existing regeneration programmes.
Many local authorities may have money under the single regeneration budget, with estates renewal programmes and transfer programmes under way. It would be silly not to try to incorporate those as a coherent whole, allowing the sum of the parts to add up to more than would be the case if each element were counted separately. It would be common sense to ensure that the programmes were genuinely integrated.
The Minister spoke of a 15 per cent. limit, but there might be occasions on which it made sense in a particular area renewal programme to go a little beyond that. That would be unnecessary on other occasions, but I hope that there can be some flexibility in the way in which she applies the rules in practice, to allow the overall impact to be considered.

Mr. Hilton Dawson: Does the right hon. Gentleman understand the scale of the housing crisis? Has he any idea of the problems faced by people


throughout the country? Has he experienced some of the Victorian, Dickensian housing conditions that exist in almost every constituency in the land? How many young homeless people did he trip over on his way to the House this afternoon?

Mr. Curry: I regret the tone of the hon. Gentleman's intervention. First, it is the Labour Government who have just said that it will be possible for a part of these resources to be used for wider regeneration programmes and not exclusively for housing. If the hon. Gentleman wants to argue with his own Front-Bench team that is fine by me, but I think that for once they are right in that regard. It makes sense to see the wider picture. The history of regeneration is of trying to deal with one aspect of deprivation, finding that that does not work and having to revisit it before long. An integrated programme works a great deal better.
As for homeless people, no doubt the hon. Member for Lancaster and Wyre (Mr. Dawson) is unaware of the various initiatives for rough sleepers. The Under-Secretary of State for the Environment, Transport and the Regions has been as supportive of those as I have. We are both deeply committed to them. This is not a silly question for smirking over, but one that matters to all sensible hon. Members on both sides of the House.

Sir Paul Beresford: Does my right hon. Friend agree that we can divide the Bill into two sections—clause 1 and clause 2? The first is a smokescreen to cover for the sort of comment that we just heard from the hon. Member for Lancaster and Wyre (Mr. Dawson)—in other words, to placate Labour Back Benchers and let them think that they are getting capital receipts instead of just a borrowing extension. On the other hand, clause 2 offers the potential for chicanery—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I appeal to hon. Members to keep their interventions brief. There should be no more long interventions.

Mr. Curry: My hon. Friend the Member for Mole Valley (Sir P. Beresford) is rapidly talking himself into a position on the Standing Committee that will scrutinise the Bill. Perhaps that might bring his intervention to a somewhat premature end—it is always a threat that one can use. My hon. Friend is right. We need to examine carefully the implications of both clauses. Got right, the Bill could be a great help; got wrong, it could be a silly waste of resources. It is important to ensure that the Bill does not go badly astray.
In the normal course of events, when a local authority receives a supplementary credit approval, that would raise its credit ceiling in the housing revenue account and it could be eligible for subsidy. Will the Government follow that route or will they allow extra borrowing without increasing the subsidy? The Minister pointed out that local authorities will be eligible in the SSA system for increased allocations in relation to their increased borrowing. So that must be taken into account in the overall total that authorities will get under the revenue support grant.
The Minister covered in some degree the treatment of large-scale voluntary transfer authorities. She answered a question by saying that, as far as is understood, they will

be left out of this. I will not resume our argument about whether need has to carry some sort of local authority badge to be real enough.
The Bill needs concentrated exploration. It is partly a smokescreen—the whole business of capital receipts is the clothing it wears, but the substance is a conventional credit approval mechanism. It is welcome that the measure should be linked more broadly to regeneration.
I will want assurances that it will not be a licence to local authorities to start building new council houses. We will want to ensure that the maximum amount is brought in from the private sector, because that makes great sense, and we will want to examine the measure in detail. At present, we have only the most flimsy detail. Because of that and because the Bill has been portrayed as something more ambitious when it is a fairly unambitious measure, we shall vote against it tonight and I invite my colleagues to join me in the Lobby.

Mr. Mike Hall: I thank my hon. Friend the Minister for her excellent introduction to this much-needed Bill.
I enjoyed the speech by the right hon. Member for Skipton and Ripon (Mr. Curry) and I hope that it is not his last from the Opposition Front Bench, given that he has backed the potential loser in today's Conservative leadership election. The right hon. Member actually analysed the failure of the previous Government's attempts to deal with the housing crisis and acknowledged that there was a crisis. However, there is a gap in his thinking about how to tackle that crisis. To their credit, the Government recognise that there is a housing crisis, and we have introduced this measure to go some way to dealing with it. Now the Conservatives have said that they will vote against it. That leads me to conclude that the Conservative party is no further forward in its thinking than it was on 1 May, and is totally out of step with thinking in the country at large.
I speak for the first time from the Government Benches and also for the first time as the Member for Weaver Vale. The boundary commissioner cut my constituency in half, so I took the Runcorn part of my previous constituency into a new one that stretches all the way down to Northwich. I will explain how the Bill will help the two borough councils that cover my constituency, Halton and Vale Royal.
I also speak as a former leader of a local authority. I know that all shades of political opinion in local government support the Government's moves to allow capital receipts held by local authorities to be taken into account in considering supplementary credit approvals in coming months. It is a shame that they are not welcomed by the small number of Conservative Members in the House today. That is not surprising. Over the past 18 years, the politically motivated approach to housing has turned the rather successful housing for rent situation of 18 years ago into the current crisis.
The crisis is manifested in several ways, such as growing waiting lists. New Members who have held surgeries will have had families come to ask what can be done to help with the provision of family accommodation. They may have been contacted by people with negative equity whose properties face repossession by building societies. They may even have been approached by


homeless people looking for somewhere to live. They know the nature of the problem. Hon. Members have experienced those problems for many years. I hope that the Bill will go some way to tackling them.
The Government's chosen path for providing social housing was through the Housing Corporation and the housing associations.

Mr. Keith Hill: Which Government?

Mr. Hall: My hon. Friend rightly reminds me that I am talking about the previous Government. In 1992, they promised to increase the resources available to housing associations, yet between 1992 and when they left office on 1 May, they cut the allocation to the Housing Corporation by £1.3 billion. It is no wonder that there is a crisis in housing.
On Saturday, my constituent Mr. Moss came to see me. He had to apologise for not having got his arguments together, because his wife had died two days before. His housing association had put up his rent by £9, from £35 to £44 a week—a 25 per cent. increase. He wanted to know what I as a Member of Parliament could do to help. I had to refer him to a fair rent tribunal, and tell him that he would have to appeal quickly if anything was to be done. That emphasises the point made by my hon. Friend the Member for Bolton, South-East (Dr. Iddon). The housing benefit bill has escalated from £3 billion to £13 billion. That is another reason why we need to tackle the crisis.
Part of Halton borough council was in my previous constituency of Warrington, South, and has come with me into Weaver Vale. There are 2,500 families on its waiting list. The situation in the Runcorn part of my constituency is peculiar because it is predominantly a new town development. My second and third generation constituents there find it almost impossible to get family accommodation. My constituents in Runcorn confront daily the problem of overcrowding. Demand for social and rented housing is high. Housing in Runcorn new town suffers from poor design, construction and layout. Again, the local authority faces escalating waiting lists, and the housing associations have to deal with severe problems.
Two hundred houses in Halton lack basic amenities—they are private houses—and 800 dwellings are unfit for habitation. If the local authority wanted to upgrade and modernise its 8,000 dwellings, it would need to spend £36 million on repairs alone. With the notional allocation of housing capital receipts, £12.4 million is available to it.
The Bill is intended to allow supplementary credit approvals to go to authorities such as Halton borough council so that they can plan their future and deal with their current crisis, and that will be very helpful. Halton has already begun to plan. It would like, for instance, to complete what it calls its "affordable warmth" scheme to improve heating and insulation, and, under the Bill, it could apply that scheme to 1,300 houses. That would mean a major improvement in the quality of a number of my constituents' houses.
Three hundred houses in Halton were built before 1939. The council wants to complete its investment programme to renovate those houses and bring them up to modern standards. Only 90 of its dwellings are maisonettes,

which, as hon. Members will know, are very unpopular with families. With the supplementary credit approval that may result from the Bill, my local authority will be able to convert those maisonettes into the modern houses for which there is such a demand. It will also be able to build 100 new houses for rent, which will improve care in the community. All that will be possible when the Bill reaches the statute book, as it is bound to do. It contrasts starkly with the £1.6 million that the last Government allocated to housing investment. I look forward to working with Halton borough council in the years to come, so that it can begin to deal with its housing crisis in partnership with the Government.
Vale Royal borough council is new to my constituency. I am very impressed by the quality of its officers and members, and its modern, forward-looking approach to tackling the problems of its community. It has two housing lists: 1,641 families are deemed to be in housing need, with a similar number on the general local authority housing waiting list. It has 3,500 houses without central heating and 3,200 post-war houses that remain unmodernised. Given the current rate of investment permitted by the last Government, it will take the authority until the year 2010 to provide central heating in all its houses and until 2050 to modernise its existing stock. Its ability to improve its unsatisfactory housing and environmental conditions has been severely constrained by the last Government's reduction in capital spending.
The last Government's single regeneration budget failed to target scarce resources on housing projects in Vale Royal. Non-traditionally designed housing has been a particular problem: hon. Members with such houses in their constituencies will know of the difficulties associated with them. The Over estate is not in my constituency, but in that of the right hon. Member for Eddisbury (Mr. Goodlad); however, I know it well. With the £9 million invested in the estate action programme, it was renovated and transformed. The programme was started on the Greenfields Park estate in 1994, but has not been completed, again because of Government cuts: £750,000 is still needed to turn its housing into modern, decent accommodation. Glebe Green is another non-traditionally designed estate, and £4.5 million is needed to make its housing fit for habitation.
Vale Royal borough council looks forward to being able to deal with its problems with the supplementary credit approval that the Bill will provide. It has £10 million in capital receipts: it is another authority that has money to invest in meeting the dire housing needs in my constituency.
Vale Royal and Halton have adopted the partnership idea, working with the private and voluntary sectors to secure the very best for their areas. They are keen to ensure that they obtain the best value for whatever money is available, working in partnership with anyone who is prepared to work with them. They are also keen to ensure that their capital receipts, or the credit approvals that will result from them, are put to the best use. Most important of all, they are determined to spend their money on improving homes for rent.
The Bill signals a new era in the provision of high-quality homes for rent. It is another measure that will remove the misplaced party-political dogma from government and the determination of how we run our affairs. It will return building workers to employment and stimulate the building supply industry. It will boost the


local economy; and, most important, it will allow my local authorities to get on with the job that they were elected to do, in partnership with their private and public sector communities, and provide houses for rent. I commend it to the House.

Mr. Philip Hammond: I am delighted to make my maiden speech in the debate on this short but important Bill, which will have a significant effect on many of my constituents.
A number of my hon. Friends who are new Members have already made their maiden speeches. My tardiness owes something to Disraeli's advice to a new Member: "It is better they wonder why you do not speak than that they wonder why you do." It must be said that if I were looking for support from my colleagues, my timing has not been perfect; but Conservative Members are not so numerous that we can afford to carry passengers indefinitely and, for better or worse, the time has now come.
I have the privilege to represent the new constituency of Runnymede and Weybridge, which was formed largely from the former Chertsey and Walton constituency, with a piece of North-West Surrey attached to it. The boundary commission seldom wins friends when naming new constituencies, but that much-maligned body has surely got it right this time in including the historic name of Runnymede in the title of a constituency for the first time.
I am sure that many hon. Members envy me a constituency which stretches from the Wentworth golf course in the west to the St. George's hill course in the east, by way of another five first-class courses. It is, perhaps, in the interest of diligent pursuit of parliamentary duties that such a constituency should return a non-golfing Member.
I follow in the footsteps of a number of eminent Members who have represented areas that are now part of my constituency, but it is my immediate predecessors in Chertsey and Walton and North-West Surrey to whom I now pay tribute. Both Sir Geoffrey Pattie and Sir Michael Grylls did excellent work on behalf of their constituents over the years, in their different ways. My special thanks are due to Sir Geoffrey Pattie for the superb apprenticeship that he bestowed on me during the 18 months before my election. He served Chertsey and Walton for 23 years, becoming a Minister and a vice-chairman of the Conservative party. I can honestly say that, if at the end of my parliamentary career I have made half as many friends and admirers in my constituency as Sir Geoffrey has, I shall regard that career as having been a great success.
Runnymede and Weybridge comprises two local authority areas, the borough of Runnymede itself and part of the borough of Elmbridge. The constituency straddles the M25 and the M3; indeed, in those road atlases that tend to exaggerate the width of roads my constituency appears to contain little other than the intersection of those two motorways. It also comprises the ancient town of Chertsey, where the Romans first crossed the River Thames, Egham, Addlestone and Weybridge, as well as the historic site of Runnymede and that of the Tudor royal palace of Oatlands. Those historic locations, together with a selection of smaller towns and villages and the garden estates of Wentworth and St. George's Hill, are set in the beautiful Surrey countryside, which many people are surprised to find so close to London.
Most, if not all, hon. Members will recognise the name of my constituency and may even be able to locate it geographically through their knowledge of the events in 1215. The basis of constitutional government in England began to emerge when Magna Carta was signed in the meadows by the Thames, between Staines and Windsor, near the town of Egham. We can trace the origins of our modern freedoms to that event which took place in my constituency. It was on 15 June that year when the King and the barons first met at Runnymede. During the next few days, they negotiated the charter. I am delighted to be able to commemorate this week, the 782nd anniversary of the signing of Magna Carta, by making my maiden contribution in the House in the name of Runnymede and Weybridge.
Rather more recently, Brooklands, in Weybridge, has been renowned as the home of British motor sport and the birthplace of the British aviation industry. It spawned an engineering industry in the area, which provided an important part of the country's aviation resource during the second world war. It has also created a surprisingly diverse economy in our constituency.
The Brooklands museum is an extraordinary tribute to the men of vision and spirit who built those twin industries on Hugh Locke-King's race-track during the 1920s and 1930s. I strongly recommend hon. Members to take the time to visit that museum when passing through my constituency.
Like people in many similar areas of the home counties, my constituents enjoy the benefits of material prosperity, which are due primarily to our proximity to London and the excellent communications that we enjoy because of the motorway network and Heathrow airport. We also suffer because of that proximity from traffic, noise, pollution and the inexorable pressure for further development. The challenge for my constituency as we move into the new millennium will be to get the balance right. We must achieve the correct balance between continuing prosperity and maintaining the quality of life in the area. That will not be an easy task, but I look forward to playing my part, together with the elected local authorities in the constituency, in achieving it over the years to come.
It will be a pleasure to work with those local authorities, especially Surrey county council, now returned to Conservative control by a substantial majority, and Runnymede borough council, which is also Conservative controlled. Whatever other messages the electors of Surrey may have sent out on 1 May, they clearly voted yes to sound Conservative principles and good management in local government.
Runnymede has the lowest council tax in Surrey while, by general consensus, delivering a high standard of services. It has no statutory obligation to do so, but it is the highest spending authority on services for the elderly in Surrey. Its programme of upgrading and improving council-owned housing stock has the widespread support of tenants. Its private sector partnerships have attracted interest across the country. A key factor in achieving that enviable combination of low council tax and high service provision has been the careful management of its capital receipts. Runnymede is debt-free and it has chosen to invest its capital receipts to produce a substantial income to supplement the council tax for the benefit of all the people of Runnymede.
When the Labour party first promoted the idea of the release of capital receipts, it was presented as some kind of cost-free option. The idea was to take out from under the bed the pot of gold that the wicked Tories had squirrelled away and to spend it to good effect. It is now generally understood that there is no pot of gold. To the extent that set-aside capital receipts are cash-backed, the cash is largely in the wrong places. In public sector borrowing terms, the receipts have already been taken into account. Any increase in the aggregate supplementary credit approvals issued will result in an increase in the public sector borrowing requirement. There is no offsetting effect on the PSBR from any notional release of set-aside capital receipts. There was no mention earlier of the Revenue effects of the increased housing provision that the Government are seeking. If the Government achieve anything by the Bill it will be only by robbing Peter to pay Paul.
The reference in the Bill to capital receipts is a smoke-screen. It does not detail the methodology that will apply in determining the supplementary credit applications. If it is to increase the amount of investment in social housing, it must envisage an increase in the aggregate amount of borrowing by local authorities for that purpose.
The Bill provides a thin cover, through the mechanism of taking total capital receipts into account when determining the supplementary credit approvals, for a transfer of borrowing power from authorities with capital receipts to those without. In many cases, that will mean a transfer of borrowing power from authorities that have managed their housing stock well; taken a forward-looking, innovative approach to housing; and undertaken large-scale voluntary transfers to those that have succeeded in frustrating their tenants' right to buy and which have eschewed the opportunities of the large-scale voluntary transfers that have brought such a welcome diversity to the social housing sector. Incidentally, such transfers have also attracted £4 billion of private sector money, which otherwise would not have been available. The Bill represents the worst kind of subsidy—a subsidy from the efficient to the inefficient.
The implementation of the Bill represents an unjustifiable penalisation of thrifty, well-managed councils such as Runnymede and an erosion of the principle of local autonomy and accountability, which the Government purport to favour. It will also lead directly to the imposition of higher council taxes and higher rents as receipt-rich authorities are forced to run down their balances and forgo the considerable income that those balances currently generate. No less an organisation than Shelter, hardly a well-known supporter of the Conservative view of the world, has calculated that council house rents will rise by £6 a week if all the receipts are released. It is clear that council taxes will rise or services will be cut as prudent councils find that the dice are loaded against them and are forced to liquidate investments.
The Bill is an attack on thrift and good management. It represents a thinly veiled transfer of borrowing power to Labour's friends in local government. I fear that my constituents may expect more of the same when the local government settlement is announced.
The Bill attacks the capital balances of prudent authorities and an attack on their revenue support will not be far behind. It is the new Government's double whammy for the council tax payers of Surrey.
When the Bill is stripped of the smokescreen of capital receipts, it is clear that it paves the way for either an increase in the PSBR or for the reallocation of borrowing power away from receipt-rich authorities. It would be better if it said so plainly without hiding behind the fig leaf of capital receipts. It represents an inefficient way of achieving the Government's legitimate manifesto commitment to higher investment in social housing.
The Bill is unfair in its effect on prudent local authorities. It is lacking in detail. It confers excessive discretion on Ministers. In short, it is an ill-conceived piece of legislation and I urge the House to vote against it on Second Reading.

Valerie Davey: I congratulate the right honourable—I am sorry, the honourable, although he might become right honourable in time—Member for Runnymede and Weybridge (Mr. Hammond) on his maiden speech. I admire him for wading in on the detail of the Bill, but I see it clearly as a supplementary credit approvals Bill and wonder at some of his detailed remarks. I was more pleased to hear about the history of his constituency and delighted that he has been able to celebrate Magna Carta in that way.
It is also appropriate that I am making my maiden speech during a debate on local government finance. In Bristol, West, local government funding—or rather cuts in funding, together with the unfair and overly complex system of distributing rate support grant—was high on the agenda during the general election campaign. Even capital funding was questioned when, with a backlog of repair needed for Bristol's schools, the local education authority was given an allocation for this year of £17,500. However, more specific to today's debate and of widespread concern to my constituency is the fact that Bristol has the highest number of homeless people outside London, most of them in Bristol, West. In addition, a recent survey showed that one in eight houses in Bristol is unfit and in urgent need of repair, so the case for this Bill is clear.
Homelessness and poor housing are not the images of Bristol, West that most visitors and many residents would recognise. It is a city which is a centre of commerce, especially banking, with a prestigious university and hospitals with excellent regional specialisms. The Clifton area, with its fine Georgian crescents and terraces, rivals the architectural prowess of Bath; and I could go on, citing the Downs, fringed with the large, comfortable Victorian houses of Henleaze. The fact is that Bristol, West, with an electorate of more than 86,000—making it the second most populous constituency after the Isle of Wight—is a microcosm of the world, divided south-north between the have-nots and the haves.
That gap has widened in recent years in respect of jobs and opportunities as well as housing. Fortunately, Bristol, West has a centuries-old tradition of bridging gaps, both literally and between peoples. There has long been support for people with enterprise and initiative, especially those challenging the norm and refusing to accept that something cannot be done—even at election time, I am glad to say. Brunel's suspension bridge and his


iron ship, the SS Great Britain, are both testimony to that vision and pioneering spirit. A smaller wooden ship—the replica of John Cabot's The Matthew—is even now crossing the Atlantic, celebrating an enterprise that reached Newfoundland 500 years ago. Just 50 years ago, Bristol extended a hand of friendship to Hanover, which in 1947 was an unusual twinning, as have been more recent links with Tblisi in Georgia and Beira in Mozambique.
Bristol, West is cosmopolitan and although it has been impoverished by divisions, it can and will be enriched by its diversity. To quote the Financial Times survey of the city earlier this month, there is in Bristol a "new spirit of co-operation". Partnerships between the city council, commerce and industry are ensuring important new developments at Bristol international airport; and the harbourside area, with millennium and, we hope, Arts Council funding, will be transformed to include an eyecatching Centre for the Performing Arts. Planning for that is going ahead, with the local community and the regional community in mind, to provide local employment and a cultural base for local children.
Over the years, politicians have also made their contribution. Under the statue of Edmund Burke in the city centre are these words:
I want to be a Member of Parliament to have my share of doing good and resisting evil.
All Bristol Members of Parliament since then have, I am sure, shared that objective, albeit some with a more radical agenda than others. My immediate predecessor, William Waldegrave, gave this House, his party and the Bristol, West constituency committed service for 18 years. During that time, he held office in a wide range of Departments, including Education, the Environment, the Foreign and Commonwealth Office, and Health; he was Chancellor of the Duchy of Lancaster and most recently served in the Treasury—no mean achievement and one that I suspect some of today's leadership candidates might wish they had. He and I often disagreed fundamentally, not least over our reading and understanding of the Scott report, but it was always in a courteous manner. In the constituency, his office had an enviable reputation for efficiency and I know that the many people who have received his help and support over the years would want me to record their appreciation.
To return to the subject of the debate, I assure hon. Members that Bristol has already taken steps to reduce the number of homeless people. The Hub centre brings together in one building and mainly for single homeless people the housing department, social services, the health authority, the Department of Social Security and the Employment Service offices and the voluntary sector. It is a model of good practice. A foyer centre is being built and the money from the initiative for those sleeping rough will be well spent. However, more has to be done and I recognise in the Bill another step towards healing the gap in Bristol, West and throughout the country between those who do and those who do not have a home. I commend the Bill.

Mr. Adrian Sanders: I pay tribute to the maiden speeches we have just heard from the hon. Member for Bristol, West (Valerie Davey)—Bristol being the capital of Cuba, the County that Used to Be

Avon—and from the hon. Member for Runnymede and Weybridge (Mr. Hammond), whose description of his constituency suggested that his predecessors might be spending more time with their golf clubs.
Addressing the Bill at hand, our main concern is that when one is in a hole—and housing finance is in a very big hole—the first thing to do is to stop digging. The Bill basically reduces the rate of the digging, but does no more than that. We heard the hon. Member for Burnley (Mr. Pike) speak of the number of pre-1914 houses and his words are true of many Pennine areas. The United Kingdom has the highest percentage of pre-1919 housing in Europe; much of it is uninhabitable by human beings and that problem is worsening. The scale of the housing crisis will not be tackled by the Bill. The hon. Member for Luton, South (Ms Moran) said that there were 4,777 people on her waiting list and asked whether the Bill would help them. The answer to that is that four or five might be helped, but certainly not 4,777.
We do not consider the Bill to be the right way to tackle the housing crisis, but I have to admit that it is better than no action at all. It is far better to reduce the rate of digging than to fail to do anything, so we broadly welcome the Bill, but we would have preferred two different measures. One Bill we would love the Government to adopt is one that would give a power of general competence to local authorities, so that they could decide whether to sell assets and where to spend the money from capital receipts without the permission of central Government. They would then be answerable to their local electorate for those decisions.
We are not convinced that redistributing supplementary credit approvals is the best way of tackling the housing crisis. We should like to know why housing investment programmes are not based entirely on need—that seems a far more sensible way of meeting housing need. We need to know precise details of the housing needs assessment so that we can judge whether it will be fair and whether it will include all relevant considerations.
I was glad to hear that there will be no restriction on the definition of housing purposes, but will local authorities decide how much to spend on new build or renovation? Will the looser definition of housing purposes extend to capacity building for tenant participation, for instance? We hope for ministerial answers.
Why does the Bill deal only with current or set-aside receipts? How will new receipts be dealt with? Will an extra subsidy be provided to ensure that councils can keep rents affordable and standards high? If the timetable in view is the financial year 1998, when will the first capital receipts become available?
We should also like to know to whom the plans that local authorities will be asked to draw up will be sent? Who will decide whether to approve them? And what criteria will determine whether such plans are approved?
A second fundamental point not yet dealt with in the debate concerns the public sector borrowing requirement and how we account for housing receipts. When an authority has sold an asset, the loss of that asset should be built into the calculations. Thus far it has not been. It seems strange that an investment made possible by realising an asset should count against, in terms of the PSBR. The Government should look into that carefully and perhaps consider a system of general government financial deficit; similar systems are used by other countries to get around the problem.
I leave the House with my reason for believing that the Bill does not tackle the housing crisis to any great extent, even though it is a welcome start. According to Shelter, the £5 billion will, at best, return housing spending to what it was under the Conservatives in 1992. By deciding to stick to Conservative spending plans for two years, the Government have effectively committed themselves to a £1.3 billion cut in housing investment by 1999. That puts the Bill in perspective.
There should be no jumping up and down and cheering for the Bill. We welcome and support it as a step in the right direction, but it is not the right way to tackle the housing crisis. No one should imagine that it will do a great deal to help constituents or the homeless, because it will not.

Mr. Barry Jones: I am pleased to follow the assured, pithy speech made by the hon. Member for Torbay (Mr. Sanders), although I would take issue with some of his criticisms.
I thought that the Minister of State's speech, opening the debate, was a milestone in local government history and a significant advance in the history of the Labour party in Parliament. On the other hand, the right hon. Member for Skipton and Ripon (Mr. Curry), a former Minister of great technical expertise, was untypically ungenerous and pernickety in his response. I regretted that.
There is nothing quite like a general election campaign to show candidates the true state of local housing stock, which is why I wanted to speak today. The Bill is certainly welcome. It is a practical measure which will improve the lives of hundreds of my poorest, least fortunate, most hard-pressed constituents. Without a shadow of doubt, local government throughout Wales will welcome the Bill.
The Principality is the seat of some of the most difficult housing problems in the UK, but I am certain that the Bill will help. When houses have been modernised by my hard-working local council, by installing central heating, double-glazed units and new doors, residents have told me of their delight. I have concluded that the quality of their lives has been greatly enhanced.
Once houses are restored, they become healthy to live in, free of damp and worthy of the description "civilised housing". In the townships of Shotton, Saltney, Buckley, Hope, Connah's Quay and Aston, the plea is still: repair and modernise; give us central heating, replace the windows, change the doors. These are not outrageous requests at the end of the 20th century. Modernisation will help young children with asthma who live in sub-standard homes. It will also help the arthritic elderly.
Modernisation will certainly create jobs, in my constituency and throughout Wales, for painters and decorators, joiners, glaziers, brickies, plumbers and local hauliers. Even on disputed figures, at least 1,600 people remain unemployed in the Deeside area. I believe that the Bill will help the unemployed into training and genuine work—work that will benefit their fellow citizens.
My council, Flintshire, estimates that it needs about £16 million over the next five years for capital expenditure on housing. In the first year of the new

Flintshire council, following the reorganisation of local government, its credit approval was cut to £1.7 million; the year after that it was cut to £1.4 million. That amounted to an horrendous cut of 45 per cent. over two years—very debilitating for the whole area.
My council has 6,900 families on the housing waiting list. Usually, the families are young, extremely stressed and poverty stricken and, as I have discovered from my surgeries, they are increasingly desperate. All they ask for is a home as a basic foundation for their family. I should like to think that this measure will speed the delivery of something that will enhance my constituents' lives. This Government, thank heaven, are prepared to help some of the more unfortunate constituents in my area.
The current new affordable rented housing programme in Flintshire is laughable. It is a monument to previous Administrations. As of today, just 30 starts by several housing associations are under way. That will not meet the problem that confronts us.
The former Alyn and Deeside district council, which is now subsumed in the new Flintshire county council, passed about £7 million of sales receipts into the treasury of the new Flintshire county council. I make this request of Ministers: I want those receipts recycled now into estates on Deeside. That is the principal plea of my local councillors and it is what residents of those estates seek.
There are in my constituency many large, post-war, aging council estates in urgent need of modernisation. They need repairs and an urgent boost in their environmental quality. Some of our largest decaying estates are frequently the seat of our gravest social problems. Unemployment and decay appear to spawn crime, vandalism, drug abuse and frequent break-ins. The Bill, by enhancing the quality of life on those aging estates, may well help us to tackle the alarming and emerging problems of what is now called the British underclass. I hope that it does.
The Bill is a response to a manifesto commitment worth keeping. It was an important humanitarian promise, which I believe is well kept as it is encompassed in the Bill. The Bill creates jobs. It will improve public health. It will create happiness and satisfaction. It is a simple, eminently justifiable measure. It represents social justice. I support it whole-heartedly and believe that it will probably be the most practical, worthwhile measure that the Government will enact.

Mr. Keith Simpson: The financial basis of the Bill reminds me of Bills concerning other aspects of proposed Government expenditure that we have debated during the past two or three weeks. As my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) suggested, the Bill before us is built on sand.
Opposition Members have concluded that, in opposition, the Labour party had not properly worked out its plans for public expenditure. It claimed that in many areas of government, including housing, the Conservative Government had failed to put in sufficient money and resources. It then told the electorate that, in government, it would follow the public expenditure plans of the previous Conservative Government, and certainly their departmental plans for the next two years.
I suspect that when the Labour Government and the Chancellor of the Exchequer achieved office, they recognised that they could not square the circle, so they were forced to seek expedients to try to match the amount of public expenditure that they require.
Detail on the financial basis of the Bill as outlined by the Minister of State is wanting. Those of us who have sat through consideration of other Bills introduced by the Government have found the same lack of detail in explanation of the finances. We must bear in mind the statement made last week by the Chief Secretary to the Treasury. He said that there would be a fundamental review of public expenditure. In my opinion, that is the key to examining the Bill and others that have been, or will be, presented to the House.
The Government cannot deliver on their twin promise of improving public services and meeting the public expenditure limits set by the Conservative Government.
I suspect that when the Deputy Prime Minister, the Secretary of State for the Environment, Transport and the Regions—and everything else—spoke to the Chancellor, he was told that the original proposal to transfer receipts from council house sales to local authorities would ultimately be calculated as public expenditure, so he had to come up with a smokescreen to mask that shortfall.
Opposition Members realise that in many constituencies there are severe problems in housing and social conditions, but in many other places such problems are not the consequence of central Government mismanagement or failure to allocate resources. In many areas—we have seen it before—problems are a direct consequence of mismanagement by local authorities, the overwhelming majority of which are Labour controlled. They have failed to manage their budgets and have run into debt.
This is not a Local Government Finance (Supplementary Credit Approvals) Bill; it is a bailing out of Labour local authorities Bill. As such, I believe that it will be shown over the next few months to lack the financial basis to produce the results that many Labour Members believe are needed and will come about. They must ask themselves what will happen when the Government are unable to square that circle—when they are unable to produce sufficient resources to cope with the problems that Labour-controlled local authorities have failed to address. The public will take note of the fact that there is a giant credibility gap.
As in the case of previous Bills, the Government need to take the Bill back and work at it again. Ironically, this is another Bill that is being rushed through the House. The only saving grace is that we have not had a review. There is a delightful contradiction: in areas where there is a relatively simple solution, the Government decide to conduct a review; where there is a difficulty, they try to rush legislation through the House without considering the details.
Conservative Members believe that the Bill is fundamentally flawed. We believe that it will not address the problem and that, ultimately, it will increase public expenditure. I suggest to Labour Members that the pay-off to them will be made in local government elections in a year's time, when their promises on this and many other matters will be shown to be flawed.
I oppose the Bill.

Mr. David Chaytor: Mr. Deputy Speaker, I thank you for allowing me to make my maiden speech as the first Labour Member of Parliament for Bury, North by contributing to this important debate.
It is a particular pleasure to be able to speak today after having listened to almost 30 maiden speeches during the various stages of the Education (Schools) Bill in the past two weeks, although the benefit obtained by listening to so many excellent speeches by other hon. Members is negated by the diminishing possibility of saying anything remotely original in one's own.
First, I pay tribute to my predecessor, Alistair Burt. Alistair served the people of Bury, North conscientiously for 14 years. He was well known and well regarded by his constituents and well respected as someone who took his responsibilities as a Member of Parliament seriously, performed his duties assiduously and carried out his ministerial responsibilities efficiently and with a degree of compassion that, I suspect, came to be increasingly at odds with the policies of the party that he represented.
Alistair Burt and I were both born and brought up in Bury, North and even attended the same secondary school—a coincidence that took on an ironic significance in the context of last week's debate on the Education (Schools) Bill.
I should also like to pay tribute to another of my predecessors, Frank White, the last Member of Parliament for the previous constituency of Bury and Radcliffe. Before boundary changes altered his seat, Frank served many of my present constituents conscientiously for nine years and I am delighted to say that he is still prominent and influential in public life locally. Both Alistair Burt and Frank White won three successive elections and it would be irresponsible of me not to attempt to continue that important local tradition.
My constituency will be well known to many hon. Members for two things above all: its black puddings and its football team. Just as in recent years the humble Bury black pudding has experienced a metamorphosis from its former status as cheap nutrition for the northern industrial working class to its new status as a delicacy that graces the tables of the most exclusive restaurants, so Bury football club, which was languishing in the lower divisions, this year won the second division championship, thus becoming one of the few football league teams in recent history to gain promotion in two successive seasons. I am sure that all hon. Members would wish to congratulate the players, staff and management of the club on that achievement. Bury football club is a model of what can be achieved by a club in a small town operating on modest budgets with strong community support. Bury still holds the record for the biggest winning margin in any English cup final. Our 6-0 defeat of Derby County in 1903 was a landslide victory of truly new Labour proportions.
However, even Bury North's gastronomic delights and sporting achievements are surpassed by its historic significance. Bury was the home of many notable manufacturers and inventors who drove forward the first industrial revolution, during which the Lancashire cotton industry contributed so much to the wealth and influence of the United Kingdom. Tragically, however, the millions of men and women who spent their lives working the machines in those cotton factories saw little of the wealth and power that they helped to create.
Bury is also the home of the Lancashire Fusiliers, one of our country's most distinguished old regiments. Its long and proud history is vividly portrayed in the regimental museum in Bury and it was a source of great pride and pleasure to thousands of local people when the Prime Minister, who was then Leader of the Opposition, visited our museum recently to inspect the unique collection of Victoria Crosses awarded to soldiers of the Lancashire Fusiliers for their bravery during the Gallipoli landings.
Bury's most famous son, however, was none other than Sir Robert Peel, who was born in Bury in 1788 and whose statue still dominates one of the main squares in the town centre. Sadly and inexplicably, Sir Robert did not stay long in Bury. Among his many remarkable achievements, Sir Robert Peel will be remembered not only for successfully splitting the Tory party in two and keeping it out of power for a generation, but for his lesser known role as the first British Prime Minister to preside over a Budget—I think that it was the 1846 Budget—that contained a 7d in the pound increase in income tax. For those who believe that history repeats itself—the first time as tragedy and the second time as farce—the parallels between the Conservative party in the mid-1840s and in the mid-1990s are remarkable. I imagine that, today of all days, the choice between tragedy and farce has been particularly poignant for Conservative Members.
Bury, North's indelible place in history was surely secured just four weeks ago in this House. Hon. Members who were listening attentively to the debate on the Second Reading of the Scottish devolution Bill will recall a reference by my hon. Friend the Member for Linlithgow (Mr. Dalyell) to the "Bury, North question". Bury, North is a long way from West Lothian, and the byzantine subtleties of the Scottish devolution debate do not often provide the main topic of conversation for my constituents; I was therefore somewhat embarrassed that not only did I not know the answer to the Bury, North question but I did not even understand the question itself.
Following that debate and related newspaper articles in The Sunday Times and  Scotland on Sunday, everyone must surely now be aware that the Bury, North question—why should English constituencies like Bury contain an average of 68,000 electors when Scottish constituencies contain a mere 55,000—is second only in significance to the West Lothian question. The point that I want to make, however, is that there is another Bury, North question, which is of far greater concern to my constituents. I shall return to it later in my speech.
My constituency is an important industrial and commercial centre to the north of the city of Manchester. It has resisted pressures to become completely absorbed within the Greater Manchester conurbation and retained a remarkable sense of identity and community, which has led to its being described as "an urban village". It is an increasingly popular place to live. My constituents like living in Bury. They tend to live there a long time and often return—as I did—after several years' absence. The pride in coming from Bury, the sense of belonging to a town with a strong identity and the belief in the importance of hard work are important qualities which have helped my constituents make the transition from a traditional Lancashire textile town with a heavy dependence on engineering and paper manufacturing to

a modern town with a diversified economy which is well placed to take advantage of opportunities created by the white heat of the information technology revolution.
When I was at school in Bury in the late 1950s and the 1960s, every building in the town was black with the soot of factory chimneys. Now, thanks to the leadership provided by a progressive and efficient local authority, Bury's historic buildings have been restored, many of our extensive parks and public open spaces have been improved, our shopping centre has been redeveloped and our market remains one of the busiest in the north-west of England.
Above all, Bury is proud of its education system, the coherence of which is due largely to the positive role played by the local education authority over many years. Opting out has had little impact in Bury, which has been consistently towards the top of the local authority league tables—an achievement which is a tribute to the hard work and dedication of Bury's teachers over many years.
In recent years, all those achievements have been put at risk because the funds—both revenue and capital—available to the local authority for investment have been cut to the bone. This is the real Bury, North question: why is Bury treated so harshly compared with almost every other similar local authority? Why is Bury allowed to spend only £79 per person on capital expenditure when Bolton is allowed to spend £118, Rochdale £120, Trafford £175 and Oldham £219? This year, the local authority has suffered cuts to its revenue budget of 10 per cent. and to its capital budget of 62 per cent. Next year, on current figures, a further cut of 6 per cent. is predicted for the revenue budget.
The draconian cuts to this year's revenue and capital budgets aroused enormous public anger and led to the largest public demonstration the town had ever seen. Almost 15,000 people signed petitions calling on the Government to relax their stringency. The previous Government did not listen. Bury suffers particularly because of the inequitable area cost adjustment element of the revenue support grant and I hope that the new Government will listen carefully to the arguments advanced by the special interest group of metropolitan authorities, whose membership is gradually increasing.
Bury also suffers gross discrimination through the allocation of standard spending assessment. For almost every SSA indicator for our main services, Bury is significantly worse off, compared not only with other districts in Greater Manchester but with the average for all metropolitan authorities. Our total SSA for the major services is 15 per cent. less than the average for metropolitan authorities. Some individual SSAs are as much as 75 per cent. less than the average.
On capital investment, this year we have an annual capital guideline for education of a mere £55,000 against an outstanding capital programme of £4 million. On social services, we have spending powers this year of £18,000 compared with spending needs totalling more than £3 million. On highways, we spend 40 per cent. less per kilometre than the average for other metropolitan districts.
Bury, North has a large quantity of late Victorian terrace houses, most of which are privately owned. A recent private sector housing stock condition survey identified £86 million worth of repairs and improvements. Bury, North has a significant amount of post-war council


housing. The 1993 stock condition survey identified £36 million of repairs and improvements. In recent years, 2,000 people a year have applied to the local authority for assistance on the ground of homelessness. We have a growing population, rising particularly in the 16 to 25 age group and the 75-plus age group. Those are the people who require special help with housing.
This, again, is the Bury, North question: when the needs of the community for better housing and more low-cost housing are so great, and the people are willing to work hard to rebuild their own communities, why have the Government starved Bury of the capital investment needed to do the job?
I shall finish with a brief anecdote. During the recent general election campaign, I spent a considerable time in the part of Bury where I spent the first eight years of my life. It contains one of the largest and most deprived housing estates in the town. There, one will still find some of the poorest housing in the north of England.
The quality of life for many of my constituents is no better, and in many cases much worse, than it was when I lived there 40 years ago. Youth unemployment is far higher than it was 40 years ago. The number of homeless young people is far higher than it was 40 years ago. The primary school that I attended and which I visited during the election campaign operated on a split site half a mile apart in 1957. It still operates on a split site half a mile apart in 1997, and the quality of its buildings is poorer.
There is a desperate need for investment in housing improvement and for more low-cost housing. The people of East Ward, like so many of my constituents in Bury, North, are prepared to work hard to rebuild their communities. All they want is a better life for their children. We owe it to them to supply the capital investment that they need to start the process of eradicating youth unemployment and youth homelessness, and to enable them to take control of the regeneration of their communities. I am delighted that this Bill makes a small but significant step in that direction.

Mrs. Jackie Ballard: I am pleased to follow the hon. Member for Bury, North (Mr. Chaytor), who made a very polished first speech. I am sure that he is now feeling the relief that I hope to feel in a few moments.
I am grateful for the opportunity to make my maiden speech especially in a debate on housing, a subject on which I have campaigned for many years and which is a matter of great concern to my constituents.
I am honoured to represent Taunton—a constituency which is not only varied and attractive, but has been represented by some distinguished Members in the past—perhaps none more distinguished than Sir Edward du Cann, who was the Member for 31 years, a record that I do not expect to achieve.
The House will well remember Sir Edward's many contributions to his party and to the House. He retired in 1987 and was replaced by my immediate predecessor, David Nicholson. I know that Mr. Nicholson will forgive me if I say that he was never quite able to live up to Sir Edward's standards of sartorial elegance. However, he was a strong defender of many of the interests of his constituents and I was pleased to work with him when I was deputy leader of Somerset county council on a successful appeal against the capping of the county's budget two years ago.
I am the first woman to represent my constituency, but not the first Liberal. From 1922 to 1924, it was represented by Sir John Hope Simpson, who sadly was a Member for less than two years—a record which I do expect to beat. He was, however, more successful than Benjamin Disraeli, who is being mentioned for the second time in this debate and who failed to get elected when he stood in Taunton in 1835.
History records that there have been many rebellions in Somerset over the years. The 1497 rising of the Cornish against Henry VII's imposition of taxes to fund war against the Scots was supported by Somerset, and, as a Scot by birth, I am happy to continue that positive link. Somerset supported Parliament in the civil war of 1642 to 1648, and, of course, the part played by the west country in the Monmouth rebellion is well known. I am sure that my party leader will be watching his enlarged west country contingent in the House closely for signs of rebellion.
I am my party's spokesperson on women's issues, and I am pleased to tell hon. Members that the patriotic celebration of the outbreak of peace in 1814 saw the beginning of women's participation in civic processions. Previously, such processions had been made up of men only, led by a John Bull figure, but in Taunton's peace festival there was a Mrs. Bull and many other women in the procession. Many years elapsed, however, between 1814 and the election of the first woman Member for the constituency.
Perhaps we do things more slowly in my constituency. I felt somewhat inadequate when I considered the number of hon. Members who had made their maiden speeches well before me, but when I looked in the Library I found that my predecessor, who was elected in June 1987, made his maiden speech in November that year, and it was also in a debate on housing. Perhaps we wait until we really have something to say.
When hon. Members think of my constituency, they may imagine only the historic county town of Taunton, which is set on the river Tone, with a thriving market and many amenities. It is the home of county cricket and the administrative centre for the county council. However, the constituency also includes the important town of Wellington, whose residents are fortunate to have Liberal Democrat representation at every level of government, from the active and lively town council to the European Parliament. We also have many small villages with evocative names such as Combe Florey, North Curry, Langford Budville and Bishops Lydeard.
My constituency stretches well beyond those villages to Simonsbath on Exmoor. The Exmoor national park has the most varied landscapes—open moorland, sheltered valleys and ancient woodland. Along with the areas of outstanding natural beauty of the Quantocks and the Blackdown hills, Exmoor acts as a magnet for many tourists every year. It is also the home of a special and pure breed of wild pony and of a wonderful red deer herd, of which I am sure hon. Members will hear much more in the coming months.
I have tried to describe something of the beauty and diversity of my constituency, but it is not all roses round the cottage door and supping cider at tea time. We have our problems, too. There are 1,800 people on the Taunton Deane housing register, many people living in substandard or overcrowded houses in multiple


occupation, 269 families in housing priority need, people living temporarily in hostels for homeless families and 30 single people every night in the emergency access accommodation provided by the Taunton Association for the Homeless.
There are even people who sleep rough on the streets of Taunton, a situation made worse by the reduction in housing benefit for young people under the age of 25. I hope that the Government will move quickly to halt the extension of the single room rent regulations to people under 60, as that would only add to the number of homeless people across the country.
There are two local authorities in my constituency—West Somerset district council and Taunton Deane borough council. The major part of the constituency is contained within the Taunton Deane area, and I intend no slight to West Somerset by concentrating on Taunton Deane in my remarks.
Taunton Deane borough council has been an excellent housing authority, both under Conservative administration in the past and under Liberal Democrat administration since 1991. It has a proud record of investment in its own housing stock and of co-operation and partnership with local private landlords, housing associations and the county council on special needs housing. The council has involved its tenants in tenants' forums and actively encourages their input into decisions affecting their homes.
Despite the efficiency and innovation of Taunton Deane borough council, it cannot meet all the local social housing needs. As I have said, there are about 2,000 families in housing need and the council has £17 million set-aside capital receipts from the sale of council housing. The housing problems in my constituency may sound less significant than those in inner cities, but it is only a matter of scale. Housing problems and homelessness are as keenly felt by every individual in the south-west as in any metropolitan area.
The people of my constituency have a right—and I do not use the word without thought: they have a right to shelter, security and a roof over their heads. They want a significantly greater housing capital programme and a return to local authority house building without the necessity to transfer stock to housing companies or housing associations. In Taunton Deane borough council, tenants have an excellent landlord whose rents are reasonable—certainly lower than those in the private sector and lower than those of most housing associations. The landlord is also approachable and democratically accountable.
Nationally, as in my constituency, over the past five years or more, the social housing stock has declined while social housing need has grown. I believe strongly and sincerely that we need to reinvigorate local authority stock and tenants by showing that local authority housing is an on-going concern on the part of the Government.

Ms Beverley Hughes: Thank you, Mr. Deputy Speaker, for allowing me to speak on a matter that is of the utmost importance to my constituents and to the constituents of many other hon. Members. I congratulate the hon. Member for Taunton (Mrs. Ballard)

on the excellent picture that she gave of her constituency. She also demonstrated her knowledge and experience of the important subject of housing—presumably gained from her local government background—and I have no doubt that she will make further memorable contributions to the House in due course.
I rise to address the House for the first time as the new Member for the new constituency of Stretford and Urmston. Over the past few weeks, I have discovered that many hon. Members are not familiar with the location of my constituency. However, I have also found that as soon as I mention Old Trafford, Manchester United or Lancashire county cricket club, they know immediately that Stretford and Urmston is not to be confused with Stratford-on-Avon, Strangford or Stafford, worthy as those places may be.
Stretford and Urmston is in Greater Manchester and lies wholly within the borough of Trafford, of which I was leader prior to my election to the House. The constituency is just to the west of Manchester city centre and embraces the inner-city areas of Old Trafford and Stretford, the former Lancashire county districts of Urmston and Davyhulme, and Partington and Carrington, a disadvantaged and isolated but very close community whose people have deserved better than they have received in recent years.
As I mentioned, mine is a new constituency which was created from half of each of the former constituencies of Stretford and Davyhulme. Happily, however, this is not so much a shotgun marriage as a welcome reunion because nine of the wards in my constituency were part of a previous Stretford constituency many years ago and are pleased to have come together again. The tenth ward, Partington and Carrington, is glad to be in the new constituency and to have a Labour Member of Parliament. The voters there consistently return Labour councillors in local elections, but have never before had a Labour Member of Parliament.
Mine is a wonderful constituency of which I am very proud. We boast some important attributes. I have mentioned Manchester United and Lancashire county cricket club, two teams of international acclaim. We are also the location for the new Trafford centre, the largest retail shopping centre and regional sports complex in Europe. Once the Secretary of State for the Environment made his decision on the go-ahead for the centre, which took nine years, we welcomed the opportunities that it would provide. We must ensure, however, that the opportunities for employment go to our local unemployed people and that we protect our existing town centres.
Our area is also to be the home of the prestigious Imperial War Museum of the North, having won the bid in partnership with the Manchester Ship Canal Company and with the support of other local authorities and private sector partners. The museum is to be on the Trafford side of the Manchester ship canal, opposite the Lowry centre to which my hon. Friend the Member for Salford (Ms Blears) referred in her maiden speech. It is very much part of a strategy by the local authorities and local business to revitalise the city region economy and the economy of the north-west, an objective of great importance and some urgency to us.
Both the Trafford centre and the Imperial War Museum of the North are located in Trafford Park which, as I am sure many hon. Members will know, was once the world's


largest manufacturing park. It is still a significant contributor to the regional and national economy, and it is home to many international companies and many medium and small indigenous businesses.
My constituency is well blessed. It is at the hub of the sub-regional and regional economy and it has enormous potential—not least in the warmth, diligence and commitment of its people, whom I thank for their overwhelming support during the general election campaign and for many years before. They know, I hope, that I will represent their interests to the best of my ability.
In so saying, I hope that I can emulate the standard set by my predecessor, now Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Manchester, Central (Mr. Lloyd). He is regarded with enormous warmth and affection by his former constituents because of his unstinting work on their behalf in the best tradition of public service, which I know he supports. I have known him personally for many years and know at first hand of his diligence and commitment, and his support for his constituents through some very lean times.
My other predecessor was Winston Churchill who, as hon. Members will know, has not returned to the House. Although I cannot speak from personal experience of his work, I place on record the appreciation of his former constituents for his many years as Member of Parliament for Davyhulme. I wish him well for the future, as I am sure the House would wish.
I have enormous pride in my constituency. I live there and I have served there in local government for many years. It has enormous strengths and potential, but, like many parts of the country—perhaps especially the north-west—it has problems, of which housing is one. As leader of Trafford council, I took over a local authority in which the previous long-standing Conservative administration had presided over under-investment and a neglect of need that were little short of scandalous. I am interested in the remarks of Conservative Members and in their failure to comment on the record of the few remaining Conservative councils, especially in relation to housing.
The Conservative approach to housing produced in my constituency, which is the area of greatest need in the borough, a legacy of substandard housing and insufficient stock. The record of the local Conservative council was compounded by that of the then central Government. Investment in the provision and repair of housing declined to an all-time low of £2.1 billion last year, compared with a peak of more than £12 billion in the mid-1970s. At the same time as Government grants and credit approvals to local authorities, through the housing investment programme, were declining—they were reduced especially drastically over the past two years—local authorities were prevented from using the set-aside capital receipts from the sale of council houses to refurbish and replenish their stock. As the House knows, that is the problem with which the Bill deals.
The argument was that such receipts should be used to redeem debt. Hon. Members who are familiar with the complex local government finance arrangements will know that there is a range of views on how far it is fair for such receipts to be used to reduce borrowing, as measured by the public sector borrowing requirement, without taking into account the revenue lost through the

sale of assets such as council housing—a point that Conservative Members, again, have consistently failed to mention.
What is important in the debate is, however, the consequence of the previous Government's policy and the impact on thousands of ordinary people. As other hon. Members have done, I could give many human stories about the tragic impact on the lives of families, older people, disabled people and young single people. The consequence has been a dramatic reduction in the availability and standard of affordable public and private sector housing. The impact on those people has been real pain and suffering—a blight on their lives which has had serious effects on health, physical and mental well-being and achievement. We know that poor housing can create those problems.
The Bill is designed to promote long-term investment in housing and in people. I am perplexed by the difficulty that Conservative Members have in understanding the mechanics of the Bill. By linking the use of set-aside capital receipts with the supplementary credit approval mechanism, it will begin to address the enormous housing deficit and chronic housing need and will target investment where the need is greatest.
By linking the potential for capital investment in housing with the potential to use that investment to promote housing-related regeneration, the Bill also promotes investment in people. Using the money to stimulate the creation of training and job opportunities is consistent with the Government's welfare to work objectives. By creating packages and voluntary agreements involving building contractors, further education colleges, training and enterprise councils and other organisations—this is already happening in the best local authorities—councils can establish the strong local partnerships needed not only to address housing need but to apply the released resources in ways which can begin to address the training and employment needs of their people, stimulating the regeneration of local communities and the local economy.
The Bill has been long awaited. I support and commend it as a mixture of pragmatism and vision in addressing two areas of great need.

Mr. William Cash: We should bear in mind the fact that the Bill reflects the success of the right-to-buy policy inaugurated by the Conservative Government in 1980. I was never enthusiastic about local authorities not being able to do as they wished with the money that came in as a result of that policy. I have always believed that to avoid the nanny state it would be better to ensure that local authorities have greater discretion, which they would have to use responsibly to justify the trust of the electorate.
It would be reasonable for the Bill to increase the responsibilities of local councillors. If that led to higher council tax or more public expenditure at local government level, it would be a matter for them and they would have to pay the penalty at the next local election. That may sound slightly heretical, but we have to think clearly about where we stand on many issues. We have to get rid of some shibboleths and engage in fresh thinking.
The Bill does not give local authorities cash: it merely increases their opportunities to borrow. I am reluctant to support that. The real reason behind that—the Minister


did not refer to this—is that local authorities, through the mechanisms of central Government, do not want to increase their overall borrowing because by doing so they would bump up against the Maastricht criteria. [Interruption.] The matter will come back again and again to haunt hon. Members on both sides who are enthusiastic about allowing the development in this country of a situation similar to that which has already caused such pain and suffering in France. Mr. Jospin has a severe problem. I suspect that Labour Members will find much the same problem.

Mr. David Kidney: Will the hon. Gentleman give way?

Mr. Cash: I am delighted to give way to my successor in Stafford.

Mr. Kidney: I hoped that that fact would attract the hon. Gentleman to give way to me. He is talking about bumping against the main expenditure total of the public sector borrowing requirement. On the subject of getting rid of shibboleths, would he like to move away from talking about the PSBR and talk instead about the general Government financial deficit—or would that be too continental for him?

Mr. Cash: I am delighted to declare my credentials as a true European. I want a European Community that really works. Domestic issues lie at the heart of European problems. This is a good example.
Shelter has put forward an important initative. I was concerned not to have heard support for it from the Government as I am sure that they know about it. We may hear something about it in the winding-up speech. If the Bill is passed, the money made available should be put to constructive use. Shelter proposes that
10 per cent. of the windfall levy and 8 per cent. of capital receipts—£140 million per annum—should be spent on getting the young homeless and badly housed off benefits and into full-time training or employment.
It proposes investment in projects such as self-build and accommodation and training initiatives. I have great sympathy with the argument that such projects would have a real impact on youth unemployment. We have to think clearly and adopt a new approach to many of the problems facing young people. If the Bill is to be passed, it is important that the views of organisations such as Shelter should be taken into account.

Mr. Gareth R. Thomas: Thank you for calling me to make my maiden speech, Mr. Deputy Speaker. I am privileged to stand here on behalf of the people of Harrow, West, where I have lived all my life. I am particularly proud to be their first Labour Member.
I pay tribute to my predecessor, Robert Hughes, who represented the seat for 10 years, serving for a time as a junior Minister responsible for science and public service. His private Member's Bill and work with the National Playing Fields Association resulted in tougher guidelines for play equipment and the safer surfacing of children's

playgrounds. I also acknowledge his enlightened support, against the advice of his party, for the Dunblane parents' campaign to ban all handguns.
In his maiden speech in 1987, my predecessor referred to Sir John Betjeman's description of the constituency as metroland at its best, containing
the serried avenues of Harrow's garden villages".
Many parts of the constituency retain a village community feel—perhaps none more than Pinner, where the successful annual fair, granted under royal charter by Henry III in 1336, took place a few weeks ago. The many active residents associations work hard to continue that sense of community, striving to protect local landmarks such as Headstone manor, where Thomas à Beckett stayed on his last, ill-fated trip to Canterbury. As we speak, the Roxborne residents are striving—rightly—to protect their local park, Field End recreation ground, from development.
Harrow, West is a diverse constituency. The gourmet will find Hatch End a delight, with its many excellent restaurants. Sports fanatics will enjoy the good standard of football to be found at Harrow Borough football club in south Harrow. The famous Harrow school also lies in my constituency. Being of Welsh origin, I am always encouraged to see the delightful Welsh chapel at the foot of the beautiful and historic Harrow-on-the-Hill.
My constituency is particularly noted for the quality of its comprehensive schooling, with the strong partnership between staff, parents and pupils responsible for consistently high standards of education. That partnership has persisted despite cuts in school budgets pushed through by local Liberal Democrat and Independent Resident councillors. Schools in my constituency will therefore be delighted with the extra money coming their way as a result of the phased abolition of the assisted places scheme.
The sense of community in my constituency is further enhanced by the dynamic voluntary sector, ably led by the Harrow Association of Voluntary Service and Harrow Council for Racial Equality.
Over the past 18 years, however, the prosperous image of my constituency has begun to slip. Businesses in the key shopping areas are under considerable pressure and more than 14,000 crimes were committed in Harrow last year, with just 22 per cent. cleared up. At the same time, the under-investment in patient care that characterised the previous Government's attitude to the national health service has pushed up waiting lists and left dedicated local general practitioners and the staff at Northwick Park and Mount Vernon hospitals ever more hard pressed.
That august publication, "The Almanac of British Politics", in suggesting that there was nothing on the horizon to challenge the Tory hegemony in Harrow, West, inevitably ignored—or perhaps failed to notice—the rising homelessness. Almost 800 families are now in temporary accommodation. It certainly failed to recognise the growth of poverty in my constituency, with the number of those on low incomes doubling between 1983 and 1995.
On 1 May, Labour was given a mandate to tackle the growth in the gap between rich and poor, to confront the problem of a high incidence of families with no one in work and to challenge the sense of despair and alienation that homelessness and unemployment engender. The Bill is a fundamental part of a programme of measures that will do just that.
There is no more basic a right than the right to a decent home. Every major public health report in the past 20 years has recognised the link between bad housing—and, indeed, no housing—and ill health. There is no more powerful evidence of the Opposition's contempt for the aspirations of thousands of people trapped in temporary or unsuitable accommodation than their appalling record on investment in social housing. According to Department of the Environment, Transport and the Regions figures, there has been a fall in total capital expenditure on housing of almost one third since 1991–92. Local authority housing investment is now one twelfth of the heights achieved under the previous Labour Government. My own local authority saw its housing investment programme allocation slashed by more than 40 per cent. last year.
The insecurity that bad or temporary housing produces destabilises communities, hindering children's development at school, gnawing away at family relationships and fostering social tensions. In my constituency, the Rayners Lane estate is in desperate need of refurbishment and modernisation. Such has been the paucity of funds from the previous Government for social housing that since 1988 all bids for funding to redevelop the estate have ended in failure. The Bill holds out hope to the residents of that estate that their aspirations for modernised, refurbished family homes will at last be achieved.
In supporting the Bill, I should like to draw attention to the particular need for investment in high-quality special needs housing. The shift away from institutional care to looking after people in the community and in their own homes requires the availability of good housing. For many of the most vulnerable members of our community, often facing appalling crises in their lives, good housing is an essential prerequisite for effective care packages and the often crucial links with local GPs and social care providers. Adapted or purpose-built housing is essential if disabled people and their carers are to play a full role in society.
I hope that we shall reinforce to local housing authorities the importance of the need to consult and work with special needs agencies and social services as they draw up proposals for the use of capital receipts.
The Bill is a crucial part of Labour's programme to tackle social exclusion. It will deliver long-term investment in our housing stock and new long-term employment prospects for many. I look forward to supporting it in its progress through the House.

Mr. Peter Luff: In many ways, this is rather a melancholy debate for Opposition Members. The roll call of former Conservative Members displaced by Labour Members includes many who would have spoken with passion about social conditions. Bob Hughes, who was referred to so eloquently by the hon. Member for Harrow, West (Mr. Thomas), David Nicholson, Alistair Burt and William Waldegrave are fine upholders of the tradition of one-nation Conservatism. Therefore, it is a slightly melancholy occasion, redeemed in part by the knowledge that my former colleagues have been replaced by so many fine speakers on both sides of the House.
I do not know how you recall your own maiden speech, Mr. Deputy Speaker. I do not look back on mine with particular pride, but every hon. Member who has made a maiden speech today has that privilege. We have heard a series of fine speeches.
I hope that the hon. Member for Stretford and Urmston (Ms Hughes) will not take it amiss if I take her to task about one aspect of her fine remarks. She talked about the record of Conservative councils. My constituency is contiguous with Wychavon district council. Under the Conservatives, it took advantage of large-scale voluntary transfer of its housing stock. To their credit, the Labour and Liberal Democrat parties that sadly took control of Wychavon two years ago embraced the policies of the Conservative group and, as a result, at least 1,000 new units of social housing will be built in Wychavon, which would not have happened otherwise. That is the effect of the previous Government's policies. They were improving the condition of housing in Britain and Conservative Members have nothing of which to be ashamed.
I found the Liberal Democrat position on the Bill rather difficult to understand. The hon. Member for Torbay (Mr. Sanders) seemed to say that it was not the right way to tackle the housing crisis. He preferred a housing investment programme based on need—the previous Government's policy—but said that he would support the Bill in any case. That is a typical example of trying to have your cake and eat it.
I pay particular tribute to my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). I am always interested in Runnymede, where my grandfather's ashes were scattered in the 1930s. My hon. Friend made a particularly eloquent speech, which addressed the hard questions about the Bill very effectively. He repeated the comments of my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) about the Bill being something of a smokescreen and not really telling the truth.
Capital receipts will still be locked up and will appear on councils' balance sheets when the Bill has taken effect. We are talking not about capital receipts, but about increased borrowing powers for councils. That is all the Bill is about; the capital receipts will still be there. I would dread having to explain that to special interest groups in my constituency. I shall probably be lucky enough not to have to do so, as my local authority is debt-free as a result of large-scale voluntary transfers, but certainly the hon. Member for Worcester (Mr. Foster) will have some difficulty explaining to the Council of Churches there exactly why, despite his promises to the contrary, capital receipts will not be released, but will still appear on the balance sheet. It will be a difficult argument for the Labour party to support.
I am glad that we are having this debate, however. The Bill is essentially a technical and enabling measure; its clauses do not even mention housing. The House gets too few opportunities to discuss housing, which, in my view, is perhaps the most important political priority for hon. Members on both sides of the House. It lies at the root of so many other problems involving health, education and crime.
I am depressed to hear Labour Members talking about the Bill as if the only answer to housing problems were more public money, more taxpayers' money and more borrowing. It is not the only answer. The previous


Government showed that the use of private money has a crucial role, particularly through large-scale voluntary transfer and partnership with housing associations. There is also another dimension that has not been discussed—I shall not do so at length, because I would be ruled out of order. It is the attempt to reduce the demand for housing by, for example, keeping families together.
I am not one of those who think that we should accept as a given the level of housing demand in our society. It is a measure not only of increased affluence and aspiration, but of real social problems. The solution to some of those problems is not just to throw more houses at them.
I seriously hope that when the Government consider how to use the supplementary credit approvals mechanism that the Bill gives them, they will, when it comes to new building, concentrate their resources not on council housing but on housing association properties, for the simple and practical reason that—even though I have my own objections to council ownership of houses—by doing so, we shall get more houses.
Shelter said helpfully in its briefing note:
New homes for people in housing need could be developed by housing associations or by local authorities. Housing associations are able to raise private finance, and therefore would be able to build more homes for the same amount of money. If housing associations are to build new homes, safeguards"—
I think that this will strike a chord with the Labour party—
must be developed to ensure that the rents are affordable and that the homes are let to people in housing need, including homeless households.
Local authorities should have a role to play in determining spending priorities in their areas.
Shelter's way forward for new Labour involves no sell-out of socialist principles. If the Government decide to allow councils to spend the money on their own direct provision, such a route would provide more houses than might otherwise be so.
There is a problem with the Bill. The sum that it will release for new housing is relatively modest: about £5 billion phased over a period—I am not quite sure how long, but over, say, five years, which is about £1 billion a year.
I am one of those who attach importance to decent housing. I am therefore inclined to believe the Chartered Institute of Housing's estimate that the backlog of disrepair in the council sector amounts to about £20 billion. The Bill will not contribute a huge amount even to the sum that the institute estimates. Although I am sure that the Government will lay the blame at the door of the previous Government, they now have to solve the problem. If they try to pretend that the Bill will enable them to make a major contribution to solving the housing problem that they say exists, they will find that they cannot stack up the argument.
The Chartered Institute of Housing estimates that there is a need for about 120,000 new social units of housing each year for the next 10 years. It estimates that £5 billion will provide only about 140,000 new housing association homes, or many fewer council homes or, if all the money were used for improvement, only about 280,000 council homes would be improved. The Government must not make exaggerated claims for the Bill.
I am afraid that such a claim is typical of the Government—quick-fix mechanisms suggested as a solution to all our problems. We saw last week, under the Bill to abolish the assisted places scheme, the suggestion that the money could solve all the problems in our primary sector. It certainly cannot; more money will be needed. The Government say that the reduction in bureaucracy in the health service that they have pledged to achieve will solve the waiting list problem. That is not so either. In each of the three areas of education, health and housing, they will have to find new money if they are to make the impact that they say they want to make. There is no point in their pretending that the Local Government Finance (Supplementary Credit Approvals) Bill will enable them to meet their real objectives.
I am particularly concerned about the lack of clarity in the mechanism that will be provided as a result of the Bill becoming an Act. I want to press the Front-Bench spokesman on whether future in-year or just historic receipts will be part of the programme. That is important. If the programme includes just historic receipts, new receipts will pile up and will not be used in any sense, even in the rather distorted, clever, smokescreen approach of increasing capital applications—supplementary credit approvals—on the back of the receipts.
The Government have a problem. They do not have enough money to do what they want. The receipts are inadequate to solve the problems that they say exist. Every pound that they spend through the Bill's mechanism represents increased public expenditure and will count against the public sector borrowing requirement, as the Deputy Prime Minister and the Labour party now accept, having denied it time and again in the past. Distribution mechanisms will have to be complex to overcome the uneven distribution of receipts. As my right hon. Friend the Member for Skipton and Ripon, the former Minister, said, there was some revelation of what they might be in the Minister of State's opening speech, but no clarity. The devil will be in that detail.
It will not do for the Government to try to pretend that there will be no impact on council tax payers. I see the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), on the Treasury Bench. In an interview in the Financial Times on 7 February, he said:
This is not a no-cost option.
He went on to say that there would be
an impact on council tax.
That is inevitable. The receipts are not lying idle in local authority coffers. They are generating interest payments that are used for a variety of purposes, such as keeping council tax down and improving services. Something has to give. One does not get something for nothing in this world—a point that I am afraid the Government have still not woken up to.
There is a fundamental unfairness about what the Government are planning to do through the Bill. The enthusiastic sellers of council houses—the ones that put in the most effort, the efficient local authorities—will not necessarily be the ones that benefit. We do not know enough about the mechanism by which supplementary credit approvals will be distributed. We have had only the most limited indication of how housing need will be taken into account in awarding supplementary credit approvals.
We know that there are better mechanisms; we already have them. The housing investment programme does precisely what the Liberal Democrats were calling for: it allocates according to need. In a funny way, it is the most socialistic way. Such a mechanism should be used. It is extraordinary that such great play has been made of releasing capital receipts—which the Bill does not—to conceal the fact that the bulk of money will still flow through the previous Conservative Government's mechanisms, such as the housing investment programme and the estates renewal challenge fund.
For my money, the best route of all is large-scale voluntary transfer. It is the real way forward that enables councils to concentrate on the enabling role, which I know Wychavon has taken to heart and is operating effectively in my constituency.
My worry is that playing with capital receipts could lead many local authorities that might have been thinking of going down the route of large-scale voluntary transfer to abandon their plans to do so. That would be a tragedy. LSVTs are the real way forward, to enable councils to get out of council housing and to fulfil their obligation effectively, by increasing the role of housing associations and the private sector in the provision of social housing in their areas. The Bill does not encourage housing associations. I hope that some of the conditions that are set subsequently will prove me wrong.
The Government should be doing more to promote the private rented sector. I fear that, if they decide to encourage council housing instead at relatively low rents, we shall not see the growth in the private rented sector that we ought to see, which would bring real increased mobility in the labour market and social benefits.
The Government must answer a host of key questions, which they have not done in the Bill. We must take an awful lot on trust. Exactly how will the phasing occur, and over what period—how much each year? Exactly what will be the methodology for distribution? If I understood the Minister correctly, we had a hint that one third of the money would be allocated according to possession of receipts and two thirds according to need. How will that need be measured? What will the money be spent on—repairs, regeneration, new build? Who will carry out those tasks—councils or housing associations? So much is unanswered. We must accept the inevitable passing of the Bill with those questions remaining unanswered. I hope that in his winding-up speech, the Under-Secretary will be able to give a firm undertaking that he will come back to the House with a firm statement on exactly the details that will be used in settling such important questions.
I must push the Government on the ring-fencing of the money for housing. We have heard before that the Government's priorities are education, education, education. The money from the Bill should be ring-fenced for housing, and I hope that we shall be given that clear assurance. We need more money for housing, although, as I have made clear, I should prefer it to be provided through other routes. I am sure that there will be huge pressure on Ministers from local authorities to allow them to use supplementary credit approvals on the back of receipts for other worthwhile social purposes. I should like an assurance that the Government will seek to resist that pressure.
I am not convinced by the Bill. It is a shallow deceit and I do not think that it deserves to become law. Although it will, the Government should be under no illusion. We shall keep them up to the mark on delivering the promises that they seek to make on the back of the Bill.

Mr. Iain Coleman: Thank you, Mr. Deputy Speaker, for calling me to speak in this important debate. I congratulate my hon. Friends the Members for Bristol, West (Valerie Davey), for Bury, North (Mr. Chaytor), for Harrow, West (Mr. Thomas) and for Stretford and Urmston (Ms Hughes) and the hon. Members for Runnymede and Weybridge (Mr. Hammond) and for Taunton (Mrs. Ballard) on their interesting, intelligent and coherent maiden speeches.
I wish to place on record my thanks to the voters of Hammersmith and Fulham for electing me as the first Member of Parliament for the new constituency. My constituency is made up of the whole of the previous Fulham constituency and the five most southerly wards of what was previously the Hammersmith constituency. It has areas of considerable affluence and wealth, notably around the southern locations of the Fulham road and the New King's road, which are generously scattered with glitzy wine bars and expensive restaurants. However, there are also pockets of deprivation sitting beside this affluence which rank with anything anywhere in the United Kingdom.
It may come as a surprise to the House to learn that Hammersmith and Fulham is the 16th poorest borough in the United Kingdom, according to the former Department of the Environment's statistics. To demonstrate what that statistic means in practice, I shall cite some further facts that may also surprise some hon. Members.
In Hammersmith and Fulham, more than 35 per cent. of households are dependent on benefit; 38 per cent. of children have no parent who is working; 42 per cent. of pensioners have a serious long-term illness; 53 per cent. of primary school children are entitled to free school meals, which is twice the national average, and in south Fulham the figure is a staggering 75 per cent; and the death rate for males under 60 is more than 60 per cent. higher than the national average.
I have advised the House of those stark and disturbing statistics to nail the wide public perception that my inner-city constituency is a cosy London base for the chattering classes and City stockbrokers. The true picture is only too often one of a community bravely but desperately struggling against poverty, sickness, unemployment and deprivation.
I also wish to pay tribute to my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Soley). For 18 years before 1 May, my hon. Friend represented in the House those residents living in the five wards I mentioned which were in the southerly part of the old Hammersmith constituency. During those years, my hon. Friend justly earned a reputation for being an excellent constituency Member. On behalf of my constituents in those old Hammersmith wards, I wish to place on record our thanks for his years of dedicated service to our community.
Some very distinguished current and former Members of the House represented the old Fulham constituency. Not least among this group was Lord Michael Stewart


who represented Fulham from 1945 to 1979 when he retired. Lord Stewart was a much-loved local figure who is still spoken of in Fulham with great warmth and huge affection. Martin Stevens was the Member of Parliament from 1979 until his untimely death in 1985. At the by-election that followed, my hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) was elected in a famous victory for the Labour party. I had the privilege of working for my hon. Friend in that by-election and have been pleased to work with him since on several issues. I am delighted that he has been appointed to his critical new job in the Government.
I also wish to take the opportunity to pay tribute to the last-ever Member of Parliament for the old Fulham constituency, Matthew Carrington. While it was inevitable that in our different roles—he as a Conservative Government loyalist and I as a Labour council leader—we would often publicly disagree, I also found Matthew to be courteous and honourable. He earned his reputation as a conscientious and diligent constituency Member of Parliament.
I shall briefly and somewhat belatedly congratulate the two professional football clubs in my constituency on their recent splendid achievements. Fulham football club has so often been threatened recently with extinction, but I am delighted to say that it is now safe and secure in its ancestral home at Craven Cottage. Doubtless, difficult negotiations lie ahead, but these are exciting times for Fulham. Recent developments have been a splendid way to end a splendid season for Fulham, which earned promotion to division two last season.
Congratulations are also in order for Chelsea football club. The Evening Standard recently castigated the right hon. Member for Kensington and Chelsea (Mr. Clark) for failing to attend the cup final even though his local side were represented. I am more than happy to defend the right hon. Gentleman against that scurrilous and disgraceful calumny against his good name, because Chelsea football club is, of course, located in my constituency. While my own footballing loyalty lies in London N5, I sincerely congratulate everyone at Stamford Bridge on their terrific achievement in winning the Football Association cup in such style.
The Evening Standard recently claimed that Chelsea had little local community support. Anyone who visited the constituency in the weeks before the cup final and saw the huge amount of decorations and bunting, or who witnessed the fantastic scenes outside Fulham town hall on the Sunday morning, when 100,000 people greeted the team and the Minister for sport, my hon. Friend the Member for West Ham (Mr. Banks), as they paraded the cup on an open-top bus will understand how off beam the newspaper's report was.
I shall turn briefly to the details of today's debate. I welcome the Bill because it demonstrates the Government's commitment to tackling homelessness and bad housing conditions. Since 1979, investment in public sector housing has declined by more than 70 per cent. Even in the current financial year, the overall housing budget has been cut by one third, which has led to a cut in London alone of approximately £285 million. The Government are correct to acknowledge that the existing

distribution of set-aside capital receipts does not necessarily reflect those areas in greatest need, which must be our greatest priority.
I have already spoken about the high levels of deprivation in parts of Hammersmith and Fulham. The council-owned stock is some of the oldest in London, with a high percentage of properties built before 1945. Inadequate capital investment has left too many homes with inadequate heating systems, rotten windows, leaking roofs and other major defects. Some of the council properties in my constituency do not have internal bathrooms. All that is despite the fact that, under the five major criteria used to measure the performance of local authority housing departments by the previous Government—the quality of the housing strategy, the commitment to the enabling role of the local authority, the quality of housing management, the degree of tenant participation and the track record in delivering capital schemes—my local authority was classed in the top 20 per cent. in London. In other words, even if local authorities played the Tory Government's game, they were still starved of the necessary investment.
In Hammersmith and Fulham today, more than 6,000 households are on the housing register. Some 2,724 households are on the transfer list, including 367 that have a family member suffering from a serious medical condition or are statutorily overcrowded. Some 748 households are in temporary accommodation. That has led to the break-up of working-class communities that have lived in those areas of my constituency for generation after generation.
With a three-bedroomed flat in south Fulham now costing an average of £200,000, young people have been forced to move away from their families, friends and relatives, leading to much heartache and anguish. The private rented sector, where it exists, is entirely beyond the reach of ordinary working people. Therefore, many young families from my constituency have been forced to move east or west, or accept that they have no prospect of bringing up a family in decent housing conditions.
No one expects that we can reverse the situation overnight. People understand that reversing almost two decades of neglect will take time. However, the opportunities presented by the increase in capital investment mean that housing strategies can be revised to allow for a planned improvement to existing housing stock.
In the past few years, those council tenants fortunate enough to have any work undertaken have had to suffer as their homes have effectively been turned into building sites for years on end while work is done in small phases to match the small levels of funding available.
The Bill will change that and will bring other much-needed benefits. It will stimulate the construction industry and create jobs not only in the building sector but in the manufacturing and engineering sectors. I reiterate my total support for this welcome and much-needed Bill.

Mr. Andrew Lansley: I am pleased to welcome the maiden speech by the hon. Member for Hammersmith and Fulham (Mr. Coleman), who spoke about his constituency with obvious affection and knowledge. I am sure that the House will look forward to his forthcoming speeches.
The hon. Member's references to Stamford Bridge and the comments of the hon. Member for Stretford and Urmston (Ms Hughes) have taken us on an FA tour in these maiden speeches. I hope that that augurs well as the Government pursue the objective of bringing the world cup to Britain at the earliest opportunity.
The hon. Member for Stretford and Urmston stated that she was looking forward to the establishment of the Imperial War Museum of the North, and, as I have the Imperial War Museum at Duxford in my constituency, I can tell her that it will be a much-valued and impressive addition to her constituency.
Turning to the matter at hand, I begin with two criticisms of the timing of the Bill. First, it is unfortunate that we are debating Second Reading when we cannot know the details of the consultation to which the Minister of State referred. It would be far preferable if the Minister were not explaining at the Dispatch Box how the measure is to work—we will then have to examine in Committee—and we could see the manner of the system that she is proposing and how the supplementary credit approvals are to be distributed, and for what purposes, during the consultation.
It would have benefited the House if it had been possible for Members to consult within their constituencies. I was able to talk to two local authorities within my constituency, but without the benefit of knowing some of the items about which the Minister told us; for example, the proportion of supplementary credit approvals related to the possession of capital receipts and the proportion to be related to need. That would have been relevant to the debate, but I was unable to discuss it with local authority representatives.
The devil is in the detail—as my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) said—and, although we will come back to the detail in Committee, it would have been better to see some of it prior to Second Reading.
A number of hon. Members have referred to the Bill as a "technical measure". When I hear that expression from a Labour Government, I think that it would be best to check the implications of the measure carefully. The last "technical measure" that we debated in the House was on an issue of great constitutional significance, the Referendums (Scotland and Wales) Bill. Here is another so-called "technical measure" which could have significant implications for my constituency and for council tax payers generally.
My second reason for regretting the timing of the Bill, and the haste with which the Government have published it, is that it would have been better for the House to debate the Bill in the wake of the Chancellor's Budget statement, rather than in advance of it. By reference to Ministers' statements, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) illustrated that the Government have pledged to maintain departmental public expenditure totals. Yet Ministers assert with great confidence that the Bill proposes additional public expenditure through the supplementary credit approvals. The only consequence can be that those additions to expenditure will be compensated for during the next two years by reductions in expenditure elsewhere in the same votes.
The role of the House—and of this debate—in looking at those additions to public expenditure is to examine the merit of what is proposed against the merit of public

expenditure in other respects. Yet the House is signally unable to do that. This is the worst kind of debate, in which one is invited to debate whether such a thing as additional housing investment is good or bad; by definition, it is good. However, the question is what is to be lost in consequence. To what extent will the burden fall on the taxpayer? To what extent will the cost be represented as a reduction in public expenditure in another part of the Department?
For those two reasons, it would be better to debate the Bill in two or three weeks' time when we have heard in the Chancellor's Budget statement the allocation that he is proposing to make to the Departments concerned. We could also see the consultation document that the Minister of State is proposing to publish soon.
My hon. Friends have stressed that we are talking not about a Bill which either mentions housing or is principally related to the release of capital receipts, but about a Bill which proposes to increase borrowing or spending by local government. When the Minister of State talks about one third of the supplementary credit approvals being related to possession of receipts and two thirds being related to need, she is illustrating that, in practice, two thirds of the additional spending will be unrelated to the possession of capital receipts. That is unless—I say "unless", because this is another point on which I am unclear—capital receipts that have accumulated in places where there is less housing need are pooled, or at least distributed to other parts of the country where there is greater housing need as reflected by the new provision indicator.
Will some authorities with greater capital receipts find that their credit approvals or capital expenditure approvals—and the subsidy that goes with some of those—are to be constrained artificially to allow other authorities to spend more? There is concern in my constituency that that is the intention of Ministers, and that a consequence will be that those authorities that rightly resisted the temptation to spend, and hang the consequences, will find that their thrift and prudent management have led to their being penalised, while other authorities that have spent without regard to the consequences will find that the Government are trying to bail them out.
I give credit where it is due. Questions were raised about what measure of receipts was to be used by the Government, and about whether there was a danger that the provision of credit liabilities might be used by Ministers to determine capital receipts for the purpose of the allocation of additional credit approvals. The Minister has said that that will not be the case, but that it will be related to accumulated reserve receipts. That is the better way to proceed.
Ministers are continuing to mislead the House on the implications of the Bill for public expenditure and taxpayers. First, I wish to refer to the consequences for the public sector borrowing requirement. If the authorities that have retained receipts have used them to repay debt or have invested them, they will lose the revenue accruing from the interest or will incur additional revenue costs arising from expenditure on additional borrowing. In either case, that will lead directly to additional Government expenditure and an increased public sector borrowing requirement.
More significantly for my constituents, there will in either case be additional costs for the council tax payer. For example, South Cambridgeshire is a debt-free authority with a provision for credit liabilities balance of about £25 million, but none of that provision is backed by cash. If South Cambridgeshire were to be required, by one route or another, or were to choose as a consequence of the legislation, to spend more, the inevitable result would be additional borrowing.
At present, South Cambridgeshire gets a revenue of about £1.2 million a year notionally derived from its balances on the general fund side, so we can clearly see the revenue consequences of about £25 million. The £1.2 million is the equivalent of about £25 a year for a band D council tax payer. We can therefore get the measure of a council tax payer's liability if the whole of the capital receipts available to a local authority were to be spent.
Cambridge city is not a debt-free authority, but has set-aside receipts of about £25 million or £26 million. If those receipts were not available and additional borrowing were needed, the increase for a band D council tax payer would be about £35. I am concerned, because the impression has been given that there is a cost-free option.
It is important that the costs should be identified and attributed, as they are potentially large. The chief executive of Camden council, writing in the Local Government Chronicle some time ago, estimated that
interest rates on reserved receipts would be financing around £400 million of local authority expenditure.
I suppose that that would be over and above current expenditure. It is not an insignificant additional cost.
I suspect that we would find that the costs were attributed back to the council tax payer in due course. Ministers said that the costs would not fall on council rents; if they are also not to fall on council tax payers, there will have to be compensation by way of revenue subsidy, in which case they will fall on the general taxpayer. The costs are large and will be attributed back to either the general or the local taxpayer.
I hope that the hon. Member for Stretford and Urmston will forgive me for referring to a remark made in a maiden speech. She said that when council houses were sold and the receipts accrued to the local authority, the revenue loss from the council rents was not counted back to the local authority; but the revenue gains from the reduction of interest payments must also be taken into account. We cannot count one way only.
I have four criticisms of the Bill. First, it has been introduced before we have seen the detail of the Government's proposals and the public expenditure consequences. Secondly, it is being presented as a cost-free option, when in fact it is a back-door way of increasing public spending, even though Ministers said repeatedly before the election that they did not intend to do that in the next two years.
Thirdly, there is no such thing as a free lunch, and the eventual cost may be as much as £400 million. For my constituents, that could represent an additional £25 to £35 a year on council tax bills or a significant increase in general taxation.
Fourthly, clause 2 is objectionable in that it is a licence for local authorities to borrow imprudently for both capital and revenue purposes. It should be local

authorities' responsibility to amortise their expenditure over a reasonable time scale and to make provision from within their revenue expenditure to meet the additional costs of borrowing or to expunge that borrowinng over time. If we give local authorities an open-ended opportunity to borrow, without a reasonable time scale for reduction, it will further exacerbate their tendency to participate in the Labour party's common approach of borrow and spend.
On the basis of those four objections, I believe that the Bill should not be given a Second Reading.

Ms Karen Buck: Thank you, Mr. Deputy Speaker, for giving me the opportunity to make my maiden speech in this debate, which marks a welcome and long overdue fresh start in housing policy.
I want to break with recent precedent by saying nothing whatever about football, other than that there are some wild proposals to bring Queen's Park Rangers home to Paddington basin; I am not an advocate of that, and it would come as something of a surprise to QPR—but who knows?
I congratulate my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman) on his excellent maiden speech. His constituents can only benefit from his passionate advocacy on behalf of them and their part of the city.
As we are discussing additional resources for my constituency, among others, I should declare an interest. I am currently, although probably not for much longer, a member of Westminster city council. Being a member of the Labour minority on that council and coming to the House as a Labour representative for part of that borough, with a Labour Government, is not an easy political place to occupy, so I shall be grateful for all the friends that I can get.
I speak on behalf of my constituents with pride, gratitude and humility. My constituency is an exciting place. Newsweek recently nominated London as the coolest city on the planet, and it undoubtedly had my patch in mind. From Portobello to Church street, we have the liveliest markets and hippest bars in town. We host the Notting hill carnival, which has its problems but is the largest and most successful street festival in Europe.
We are, however, an area of extremes. We span St. John's Wood, Lord's cricket ground, Madame Tussaud's and the zoo; yet a short stroll up the Grand Union canal, under the shadow of the Westway, brings one to some of the most acutely deprived corners of the city. They are, thankfully, no longer as deprived as in the days when the piggeries stood off Ladbroke grove and infant mortality reached 87 per cent. as humans and animals vied as to who lived in the greater squalor.
Perhaps we are also slightly better off than in the days of Rachmanism, which had a hold in my part of the city. For an evocative description of those days and of my part of North Kensington, I would guide hon. Members to Colin MacInnes's description of Napoli in "Absolute Beginners" which, as everyone knows, is Britain's greatest post-war novel.
Much of our corner of the city is still not doing so well. In the shadow of some of Britain's wealthiest streets are pockets of chronic unemployment and poverty.


Our communities are scarred by crime and drug abuse. Our black and ethnic minority communities, from or with roots in the Caribbean, Morocco and Bangladesh, among many other places, experience unemployment disproportionately, at levels two or three times higher than the general population.
Those people also experience the worst social conditions and bear the added burden of racial disadvantage and discrimination. Unfortunately, in a society that has become so unequal, diversity is not something that we can simply celebrate. Inequality turns diversity into a ladder of deprivation and, therefore, it is an inequality which our new Government must tackle.
Our housing conditions mirror and to some extent exacerbate the inequality that I described. At one end of the housing spectrum, we have some of the country's most expensive homes. A little further down the price ladder, are the private leasehold homes, where there are frequently chronic problems between leaseholders and management companies over repairs and maintenance charges.
I want to pay tribute to my two predecessors, Sir Dudley Fishburn and Sir John Wheeler. Sir Dudley Fishburn enjoyed a reputation as an assiduous constituency Member. Both Sir Dudley and Sir John put considerable effort into campaigning for the rights of leaseholders. It is not their fault that the previous Government bequeathed a continuing mess on leasehold reform. I look forward to the new Government dealing with that.
Our private rented sector is a long way from being the engine of a newly revived third force between owner-occupation and social renting, capable of meeting the needs of people requiring short-term housing to match labour market flexibility. Rents have been escalating to the point at which they are inflicting serious damage on settled communities, with rent increases of 25 and 35 per cent. not uncommon. Private sector rents are breaking the housing benefit bank and locking people into the poverty trap. Worse still, the combination of high rents and short tenancies is a major factor in homelessness. Figures that I have just obtained from Westminster city council, for example, show that the termination of lease or tenancy was the single largest cause of homelessness last year, affecting 876 households or one in five of total homeless applicants. I look forward to further discussions on how we can stimulate the private rented sector, but without those undesirable side effects.
Perhaps, it is in the council and former council stock that we face some of the greatest housing problems. There is severe housing need in north Kensington, where the relatively new tenant management organisation and many well-established housing associations are struggling to deal with the problems. I think for example, of some of my constituents whose cases I am dealing with, such as the family of 10 shoe-horned into a two-bedroom flat 11 storeys up a tower block.
In Westminster, the story has been far more controversial. Despite a well-researched level of housing need, confirmed most recently by surveys that found 12,015 households or 12.5 per cent. of the population in housing need, Westminster's ruling Conservative group chose to play politics for its own electoral ends. The result was the district auditor's conclusion last year that certain members and officers had acted unlawfully with regard to

their "designated sales" policy at a cost to the taxpayer of £31 million. No doubt the House will hear more of that story in the coming months. When we do, we must at all times remember the victims: first, the council taxpayers who have forgone the benefit of that wasted £31 million; secondly, the many people who innocently bought council properties and found themselves unable to sell while at the same time being confronted with huge and unexpected service-charge liabilities, in some instances leading to homelessness and repossessions; and, thirdly, people in housing need who saw precious social rented property sold off. Since 1988, Westminster city council has sold more than 1,300 precious homes over and above those sold under the right to buy. I have no doubt that that issue deserves the attention of our new Government. For those reasons, I welcome the Government's close scrutiny of the local use of resources.
So, my constituency can certainly be defined as having housing need. Investment in the building of new homes or refurbishment of existing homes will be greatly valued. We will build on partnerships with the best housing associations. I commend the work done by Walterton and Elgin Community Homes as just one example of what can be achieved when local people work together with housing associations through the whole process of design, building and renovation.
We can and must look imaginatively at how the inner city can play its part in meeting the growing demand for homes—refurbishment of existing properties from all sectors and conversion from offices, as well as new build. We must ensure that the potential from our few remaining large sites is not lost. Locally, I think of Paddington basin and goods yard, which forms the border of my constituency. It offers exciting potential for affordable housing and leisure, as well as commercial use, but it cannot be allowed to become another enclave of luxury housing, spearing additional traffic on to local roads, 100 yd from north Paddington, but on a different planet.
The Bill is to be welcomed, since it gives us the opportunity to make real inroads into tackling housing need. It also deserves applause for placing housing in a wider economic and social context. The housing programme will create much-needed jobs. We must rise to the challenge of developing training schemes that can supply skilled labour to the construction industry.
Before I conclude, I must draw the attention of the House to one further substantial benefit that will accrue from our revived housing programme, which is the benefit to public health. The local health profiles for north Kensington and north Paddington point out that housing conditions are often used as proxy indicators of material deprivation when investigating the association between poverty and ill health. Overcrowding is associated with the increased risk of respiratory infections, gastro-intestinal infections, peptic ulcers, home accidents, chronic obstructive airway disease and increased mortality rates from coronary heart disease, lung and cervical cancer, as well as poor mental health. Our assault on housing need will, therefore, constitute an assault on poverty and ill health as well.
Finally, the housing investments released by the Bill will enable us to consider the infrastructure needs of our communities, such as child care, economic development, small business premises and so forth. In that way, the creation of new homes will go hand in hand with the


wider regeneration that so much of my constituency so desperately requires and which the Government were elected to deliver.

Mr. Paul Burstow: First, I must congratulate the hon. Member for Regent's Park and Kensington, North (Ms Buck) on her maiden speech. I was pleased that she did not dwell for long on football, which I gather has been much touched upon in today's debate. She painted a clear and good picture of her constituency. While I also have a London constituency, she almost made me feel that her seat was more interesting and exciting than mine. She rightly drew attention to the way in which an area's appearance can be misleading—it can appear affluent on the surface, belying the pressures below the surface. I shall return to that subject in my remarks on the Bill.
I welcome the Bill, as do my colleagues on the Liberal Democrat Benches. The relaxation of the control over the use of capital receipts is long overdue. It is important that the Bill is enacted as soon as possible, to implement not merely a commitment made by the Government but one made by the Liberal Democrats. We want action now to tackle unmet housing need. It has been estimated that since 1989–90—the last year when receipts were reuseable—investment has fallen by about £5 billion, or 60 per cent. The consequences are only too obvious—a huge repairs backlog and a shortfall in the provision of new housing for rent.
In 1996, households accepted as homeless amounted to 121,990. Shelter has turned that figure into the number of people involved—350,000 people were homeless in 1996. That is the measure of the problem.
I said that an area's appearance can mislead us about its problems. My constituency has an image of being a green, leafy and pleasant suburban area in which to live. It, too, has unmet housing needs—needs which I hope that Bill will go some way to address.
If the Bill becomes an Act, as I am sure it will, I hope my local authority of Sutton will be able to take some action on three particular needs. The first is the need for self-contained accommodation for young people. The homeless persons unit in my local authority has on its list 100 young people in need of such accommodation. That may seem a small number when compared with other areas, but it is a pressure on those individuals, which needs to be sorted out.
Secondly, there is a need to provide accommodation for people with multiple special needs—often a combination of drug, alcohol and mental health problems. Finally, we also need housing for people with mental health problems, who often need a high level of support, but are not necessarily suited to group homes.
I asked finance officers in my local authority their estimate of Sutton's housing reserved receipts to get an idea of what might become available. The figure was £22 million. I hope that relaxation of controls will mean that my authority can fulfil its aims and ambitions for a single regeneration budget project in which it has been engaged for some time on the Roundshaw estate. It is a 1960s deck-access estate with many problems, and a great concern of my hon. Friend the Member for Carshalton

and Wallington (Mr. Brake), in whose constituency it lies. We share a local authority, and thus an interest in the project's progress. I hope that unlocking receipts and making resources available will enable my local authority to tackle its repairs backlog with greater vigour and allow us to increase the number of advances to housing associations for new projects.
I was pleased by the assurances that we were given earlier about the need for a broad definition of housing in respect of expenditure under the Bill. Regeneration projects that involve housing encompass far more than the bricks and mortar of their buildings. We need to consider community safety issues and ensure that we take public health into account. We must examine energy conservation and how to deal with fuel poverty.
We must also consider accessibility in taking projects forward. As the Bill progresses, we must try to ensure that when social housing is built or renovated, the access requirements of disabled people are taken into account. In a written question a few weeks ago, I asked whether the Government would make a firm commitment to extend part M of the building regulations to cover all dwellings as a first step to extending access for disabled people. I hope that the Bill will at the very least allow the extension of part M to new buildings and to those that are being renovated with money spent under it.
I have a question about the wording of clause 1, to which those hon. Members who are fortunate enough to serve on the Committee will no doubt return. Having talked to people more expert than I on drafting Bills, I understand that it is intended as the device to enable redistribution of resources using supplementary credit approvals, but I do not understand how the wording achieves that intent. I hope that in Committee we can agree a more intelligible form of words.
Reference was made earlier to how the Bill will increase the public sector borrowing requirement. The previous Government used controls over capital receipts as a way of reducing the PSBR. I hope that the new Government will take the opportunity to review the Treasury rules on capital and revenue expenditure. Those of us who come from local government are only too familiar with separating revenue expenditure from capital expenditure in the way in which we account for them. The Government should look to do much the same to allow a more sensible attitude on how capital expenditure is raised to take forward much-needed projects.
The hon. Member for Mid-Worcestershire (Mr. Luff) attacked the Liberal Democrats for being critical of the Bill for not going far enough. However, he answered that criticism more adequately than I could have by going on to state that the Institute of Housing had identified a £20 billion housing repair backlog, which is a sum far greater than the resources that the Bill will unlock.
The Bill is welcome, but the House would be deluding itself if it believed that it does more than scratch the surface of housing need. It would be wrong for us to be under the illusion that the £5 billion that it releases will address the issues that Shelter and other organisations have campaigned about for so long. While we support the Bill, we will continue to urge the Government to do more.

Ms Rosie Winterton: I congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) on her evocative and passionate speech. Her experience as a Westminster councillor has made her an expert on housing and local government. I am sure that her constituents will appreciate that. I am grateful for the opportunity to make my maiden speech on this important Bill, which will benefit directly the lives of many of my constituents in Doncaster, Central by improving housing provision and generating much-needed jobs.
In making a maiden speech, it is customary to refer to one's immediate predecessor. I would like to go much further by paying a heartfelt tribute to Sir Harold Walker. He turned a Conservative seat into a Labour one in 1964, and served the people of Doncaster, Central loyally for 33 years. The people of Doncaster returned that loyalty with not only deep respect but true affection. Those feelings did not stem only from the fact that Sir Harold was an excellent constituency Member. Doncaster people are proud of Harold's national work. He was the longest-serving Employment Minister and piloted through Parliament the Health and Safety at Work, etc. Act 1974, the Employment Protection Act 1975, and the Equal Pay Act 1970. He reformed the Merchant Shipping Acts and introduced many other pieces of legislation that bettered the employment conditions of millions of working people. Sir Harold went on to occupy with great distinction the position of Deputy Speaker and Chairman of Ways and Means for nine years.
Sir Harold's one shortcoming is his time-keeping, which is due only to the fact that he so enjoys talking to people that he is often delayed in getting to meetings. He takes jokes about it in good heart, and during the general election campaign he apologised to an assembled company for his delayed arrival by saying, rather proudly, "I am of course known throughout Doncaster as the late Sir Harold Walker."
During the general election campaign, I was reminded time after time by constituents of what a hard act to follow Harold would be. That was an unnerving experience, but Harold and his wife Mary did everything possible to help me during the campaign. They both worked tirelessly on my behalf; I could not have asked for more. Harold is not the tallest of men, and perhaps derives some pleasure from the thought that whilst he cannot tower over many people, he can at least tower over his successor.
Doncaster is renowned for its coal mining, its railways and its thoroughbred horse racing, which takes place on the Town Moor course. The Grand St. Leger, as I am sure hon. Members know, is one of the highlights of the racing calendar. There is one other fact about Doncaster that I hope will cause Ministers to look favourably on my constituency. In 1899, the Doncaster branch of the Amalgamated Society of Railway Servants sent a motion to the Trades Union Congress meeting in Plymouth. The motion called on the TUC to organise a joint conference with socialist and co-operative bodies to discuss Labour representation. Thus it was really in Doncaster that the Labour party was conceived. I am sure that hon. Members will be delighted to learn that the foundation meeting of the society was held at the Good Woman inn at St. Sepulchre Gate in Doncaster.
For me, being the area's Member of Parliament is a special honour, as I was brought up in Doncaster. My mother Valerie was a nursery school teacher, and my father Gordon a local head teacher—and, later, an elected representative on Doncaster council. Let me take this opportunity to thank not only the electors of Doncaster, Central for giving me the privilege of serving them, but the members of the constituency Labour party for campaigning for me in the recent historic general election, with its Labour landslide.
Yorkshire people are famous for the warmth of their welcome, and the people of Doncaster are no exception. Since the election, I have been overwhelmed by people's generosity and kindness, and I intend to repay that by doing my best to represent their interests in the House.
The Bill that we are discussing is about achieving two of the Government's important objectives, jobs and social justice. When it is passed, councils such as mine in Doncaster will at last be able to use some of the money that they have in the bank from the sale of council houses to modernise existing homes and to build desperately needed new ones. The consequent building and refurbishment programme can be used to provide much-needed jobs and training in Doncaster. I believe that the Bill will end 18 years of unremitting underinvestment in housing in Doncaster.
More than 5,000 people in my constituency alone are victims of Tory neglect, waiting for homes and worried about accommodation for themselves and their families. They deserve better, and the Bill will help them in their aspirations for a better life. Too many people in the Doncaster area are out of work, alienated and disaffected because they see little hope or future. The knock-on effects on society, in terms of crime and the growing drug culture, are frightening to witness.
Much of the drive for change that will be brought about by the Bill is due to our two Ministers' lifetime commitment to decent housing for all, and to local government. I understand that the Government will be looking to the construction industry to provide a significant number of new jobs and apprenticeships, but let me take that further, and ask whether the Ministers will visit my constituency to hear at first hand from a cross-section of representatives of my local authority and the voluntary and private sectors what Doncaster can do to assist in achieving the Government's stated aims—securing jobs and social justice.
Britain's housing problems cannot be eliminated overnight, and unemployment cannot be made to disappear immediately, but both difficulties can be alleviated through the regional development planning to which my right hon. Friend the Deputy Prime Minister and Secretary of State for the Environment, Transport and the Regions and his Ministers are dedicated. The Yorkshire and Humberside region could become the most exciting growth area in the country. From Sheffield to Humberside stretches a conurbation of great economic potential, where considerable growth could take place. Through the policies of my right hon. Friend and his Ministers, that growth will be encouraged, cultivated and fashioned to bring about a regeneration of Yorkshire and Humberside.
The Bill makes a start by tackling the basic issue of people's right to decent homes. I believe that, if we can sort that out, many of society's other problems can be tackled effectively. That is why I welcome the Bill, on behalf of my constituents in Doncaster, Central.

Mrs. Theresa May: I congratulate the hon. Member for Doncaster, Central (Ms Winterton) on a fine maiden speech. From the sound of it, she is deeply rooted in her community in Doncaster, and her speech suggests that she will make a fine representative of her constituents.
I apologise if I am about to tread on convention, but may I also take the opportunity to welcome the Minister of State, the hon. Member for North-West Durham (Ms Armstrong), to the Government Front Bench? I do so particularly because it was she who frustrated my first attempt to gain entry to the House, back in 1992.
To the uninitiated, the Bill will seem very simple—it covers slightly less than a page in words of substance—but, as the Minister made clear in her opening remarks, it deals with a number of complex issues, although, given what has been said by Labour Members, some of them have failed to reach even them. Some of my hon. Friends have referred to those complexities, particularly the Bill's impact on the public sector borrowing requirement. That was mentioned in the eloquent maiden speech of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) who, I believe, introduced the term smokescreen in relation to the Bill. He was referring to the Government's attempt to avoid, or smoke over, the Bill's impact on the PSBR and on local authorities. Some of my hon. Friends have also mentioned the potential impact on rents, which has been identified by Shelter.
Smokescreen, however, is a term that can be used about the Bill in another sense. A number of Labour Members have said that the Bill is a response to the Labour party's manifesto commitment to release capital receipts set aside from the sale of council houses and to use the money to improve council housing or to build new stock. The Bill does not do that: it is not about the release of capital receipts from the sale of council houses. It is a Bill for borrowing—a Bill which increases the ability to borrow, but does not refer to the release of receipts. As the Library makes clear in its research paper, although the explanatory memorandum states that
this measure will 'allow the controlled release of reserved receipts from the sale of council houses', the detail on how this will be achieved is not in the Bill.
The Bill is not about releasing money set aside from the sale of council houses; it is about increasing borrowing—which is why it is all the more unfortunate that Labour Members have not said more about its impact on overall public sector borrowing and public sector finance in general.
The Bill is something of a smokescreen for another reason. As the Minister made clear in her opening remarks, there will be criteria on which the ability to exercise supplementary credit approvals will be judged. Reference was made to that being based on need. As yet, we do not have the definitions of the criteria and we do not know in detail how the process of deciding which

local authorities will be able to benefit from the supplementary credit approvals will operate. It is unfortunate that the Government did not delay publication of the Bill until they had those details. If they had, we would have been able to consider the dual aspects of the Bill—the process by which extra supplementary credit approvals will be given and the definitions by which those approvals will be judged appropriate. As it stands, we have no idea how the approvals will be allocated to local authorities. It would have been preferable for the Government to wait until that detail was known.
For some time, many of us have found the operation of the definition of need by the former Department of the Environment as less than satisfactory. I know about Wokingham district council's concern at the somewhat arbitrary way in which the definition of need appeared to be exercised by that Department when deciding the standard spending assessment according to the agreed formula. It would have been far better to be able to scrutinise how those supplementary credit approvals will be identified and allocated before having to decide whether to support the Bill.
There are many other aspects to the Bill that I would have preferred to be at the fore. My hon. Friend the Member for Mid-Worcestershire (Mr. Luff) spoke about the extent to which we should not be talking simply about local authorities' ability to improve housing or to increase their housing stock, but about how that could be done in partnerships or by housing associations.
Several Labour Members have made heartfelt, passionate speeches about the condition of the housing stock in different parts of the country. It has long been my belief that the quality of the housing stock represents a record of failure over many years by local authorities to manage it. I do not believe that local authorities are very good at that job. One of my concerns about the Bill is the underlying assumption that money will be released primarily to local authorities to improve housing stock. I note that the Minister is shaking her head, so I trust that the Government will be looking at other engines to improve the housing stock or to build new housing. If that is the case, I am grateful to the Government.
A number of issues should have been debated today; instead, we have a short Bill. Many questions such as those raised by outside organisations such as Shelter about the treatment of in-year receipts remain unanswered. It would be far preferable to have answers to those questions before the Bill proceeds. Yet again, however, the Bill is being rushed through on the basis of honouring a manifesto commitment. It is palpable that that commitment will not be met because the Bill is about something different.
The Bill is not about releasing capital receipts from the sale of council houses, but about providing the means for extra borrowing. It is important that that is made clear and that the questions that my colleagues and I have raised are answered before we allow the Bill to proceed.

Ms Siobhain McDonagh: Thank you for calling me, Mr. Deputy Speaker, to make my maiden speech. I would like to congratulate all those hon. Members who have made their maiden speeches today. I hope that they will not contrast my contribution too unkindly with theirs. It is interesting that I should


speak after the hon. Member for Wokingham, or rather for Maidenhead (Mrs. May), because the last time we met was across a council chamber. In politics it seems that we move in a small circle, given that we have bumped into one another again.
I represent the constituency of Mitcham and Morden, which was formed in 1974. Until 1982 it was represented by Bruce Douglas-Mann. Some senior Members may recall that he was the only defector to the Social Democratic party who caused a by-election. Although he did not have luck on his side, because it was called just as the Falklands war commenced, he was an assiduous constituency Member whose memory is still held dear by a number of my older constituents. I understand that Bruce has fought a gallant fight against serious illness in the past few years. He has made a recovery, and I am sure that all hon. Members would wish him well in his continuing fight against illness.
For the past 15 years, the seat has been held by Dame Angela Rumbold, who had success at that by-election. She was my opponent in the elections of 1987, 1992 and more recently on 1 May. Hon. Members will gather from that that neither I nor my constituency are overnight successes.
It would be wrong for me to suggest that I had a great friendship with Dame Angela. In fact, I would be subject to retribution from someone of even higher standing than either you, Mr. Deputy Speaker, or anyone else in the House were I to do so. Nevertheless, I admired Dame Angela's single-minded determination to succeed, her work as a campaigner and her instincts for political survival, even if that meant bringing down her party as she attempted to do during the recent campaign.
Dame Angela's talents were recognised and she became a vice-chair of the Conservative party with particular responsibility for the selection of female candidates. Although I hold the hon. Member for Maidenhead in great esteem, she was the only new woman candidate selected for a safe Conservative seat. Dame Angela's other contribution was to snatch defeat from the jaws of victory in the Conservative party's submission to the boundary commission. I am sure that a number of my hon. Friends are particularly grateful to her for that work.
I was born and brought up in my constituency, where I have always lived. It is the only seat for which I ever sought selection or which I would ever want to represent. Although it is a place that I hold in great affection, I would not attempt to suggest that it is the most beautiful or dynamic constituency in the country. Although the constituency is home to 474 acres of Mitcham common and the beautiful Morden park, which is well looked after by the National Trust, and while we can boast the oldest cricket green in the world, it also marks the end of the Northern line. I hope that that service will improve under the new Government.
Mine is a constituency of two halves—those who regard themselves as Londoners and those who think that they live in Surrey. It is a suburban seat to which people come to raise their families and where they generally enjoy living. On behalf of those people, in particular the one in five households who live in council accommodation, the 200 families in significant housing need each year who have no chance of being housed, and the many people who work in the building industry either in small firms or as self-employed, be they plasterers,

bricklayers or carpenters, I commend the Bill to the House. I also commend it on behalf of those young people in my constituency who desperately want a trade and who want the opportunity to make their future better.
I assure the House that the Bill is well supported by my constituents irrespective of whether they are owner-occupiers, tenants or leaseholders. It is with some incredulity that we have witnessed my council, which raised £56 million from the sale of council houses, being unable to afford to make the most basic improvements—the installation of central heating or new windows—available to the vast proportion of its tenants.
My tenants associations of Lavender, Glebe Court and Phipps Bridge wrote on numerous occasions to their previous Member asking her to support their attempts to persuade the then Government to use capital receipts to improve their homes.
My constituency consists of half of the London borough of Merton, which has amassed considerable amounts of money from the sale of council housing. The respective Labour and Conservative councils have always worked efficiently to sell what we had to benefit our voters in the best way. We appreciate that we will not have access to all the funds currently held by the council. We are happy with the two thirds:one third split proposed in the Bill, which suggests that the formula will be based on need and the amount of money that each council holds. Nevertheless, we believe that our one third will represent about £20 million over a five-year period.
We welcome the use of special credit approvals, which will not cause problems in the council's funding as a whole. We also welcome the revenue subsidy, which means that rents will not escalate. Our tenants will therefore not be forced into the benefit trap, whereby they consider it better to remain on benefit than in work because of those increased rents—increases made to make possible the improvements to their homes.
In the six weeks since my election, I have heard great speeches on great things about which I know little. Politicians of all parties in every area of public life are motivated by the people they meet and the problems they experience. As someone who has spent the past 16 years working in public housing, five of them as chair of my local housing committee, I know what the Bill will mean to all those elderly tenants on the St. Helier estate in Morden, who have worked all their lives and fought in a world war, but whose council cannot provide them with the central heating they need during the winter.
On a positive note, I have seen how well we can use the money from the sale of council houses. When the Conservative Government allowed us a capital receipts holiday we tore down some of our worst tower blocks and provided homes with gardens. This may be a local government finance Bill, but the stuff it is made of is central heating, double glazing and housing with gardens. It is an opportunity to improve the life chances of all our constituents and I commend it to the House.

Mr. Peter Bradley: In embarking on my maiden speech, I congratulate those for whom the ordeal is recently over, particularly my hon. Friend the Member for Mitcham and Morden (Ms McDonagh). It is a far, far better thing that she has done than I might achieve in the next few minutes.
The traditions of this House are daunting—not so much the shuffling and sneezing in the Lobbies as the fact that this is the mother of parliaments. Fox, Pitt, Keir Hardie, Nye Bevan and others of their stature have sat, stood and spoken in the places that we now occupy. I should also mention the three hon. Members who in the last Parliament represented the communities that now make up the constituency of The Wrekin, which I am proud to represent.
For many years, John Biffen, now Lord Biffen, was held in great esteem by his colleagues on the Conservative Benches and by the then Opposition Members; he was also held in great affection by his constituents. As befits a man of his record, he has now gone, if not to a better place, at least to another place. The hon. Member for Ludlow (Mr. Gill) represented for some years part of my constituency—the villages of Shifnal and Albrighton. He is a great advocate for Shropshire, even if he would like the county better if it could be further detached from Europe. Finally, my hon. Friend the Member for Telford (Mr. Grocott) is a true champion of his constituents. He is respected on both sides of the House and my right hon. Friend the Prime Minister made an inspired choice in appointing him his parliamentary private secretary.
This is a crucial debate. Everyone recognises that we are living through a housing crisis of monumental proportions, although one would not get the impression, listening to Conservative Members, that they had presided over that crisis for almost two decades. It is ironic, albeit interesting, that they pray in aid Shelter—an organisation which vigorously campaigned against the policies of the Conservative Government for 17 or 18 years. As this is my maiden speech and I am therefore obliged to be charitable, or at least uncontroversial, I have to concede that it is refreshing to hear them now admitting the existence of a housing problem, even if they are quibbling about the solution.
There is a housing crisis. It damages the lives of individuals, families and entire communities throughout the country. Taxpayers spend millions of pounds on the costs of homelessness—on temporary accommodation and the associated benefits and social services that people in poor housing receive. Hundreds of thousands of construction workers are kept unemployed and on the dole when they could and should be at work, building or restoring homes for those who need them. The crisis is a testament to the record of the Conservative Government over the past 18 years. The record of the new Labour Government will depend to a large extent on what we do now, which is one of the reasons why the Bill is so welcome.
The Bill will be as welcome in the semi-rural constituency I now represent as in the inner-city ward that I represented for more than a decade. That ward is no more than a few hundred yards from the Palace of Westminster—Millbank ward, in which Millbank tower is situated, which is where our great election victory was planned. In the 10 years that I was a member of Westminster city council—it is important to my reputation to stress that I was a Labour member of that council—I saw what the Conservative local authority that out-conservatived all local authorities could do through housing and other policies to decent, honest, ordinary people. I saw the community I represented decimated by

the dogma of Tory housing policy and I know how important it is to my constituents—then and now—that this Bill and future measures be enacted.
My hon. Friend the Member for Bristol, West (Valerie Davey) was somewhat extravagant in claiming that her constituency was a microcosm of the universe. I make a more modest claim for The Wrekin: the whole nation is contained in my constituency, from the factories at Hadley where GKN builds Warrior armoured vehicles for the British Army and all the British Telecom telephones on our streets, to the fields where Shropshire farmers produce some of the best beef and sugar beet in England. I have to admit that I am not sure how one judges one bit of sugar beet against another, but no doubt I shall discover the finer points of sugar beet production during the life of this Parliament. My constituency contains market towns such as Shifnal and Albrighton, Newport and Wellington; old mining communities, many of which originated in the constituency of my hon. Friend the Member for North Durham (Mr. Radice); the Army base at Donnington and the RAF base at Cosford; and hi-tech industries in new business parks all over the constituency.
We in The Wrekin enjoy all the nation's strengths, but also many of its weaknesses. Recently, the Henley centre reported that our district is sixth out of 459 local authority areas in terms of economic dynamism, but 296th in the poverty stakes. That is because The Wrekin is the nation's low pay capital: unemployment is low, if we trust unemployment statistics, but the price that too many people have to pay for a job is low-paid, part-time or temporary employment when full-time and decent, secure employment is what is needed. Employment rights are inadequate and business also pays a price because low pay goes with low skills. Not long ago, I met a business man who benefited from the incentives to locate and expand his business in The Wrekin, but who is now transporting it, lock, stock and barrel, to south Wales because he found that when he wanted sophisticated and improved production he could not find the necessary skills in the local economy.
In Shropshire, 13,000 people earn less than £3 an hour; and 3,500 earn less than £2 an hour. It is hardly surprising that 2,500 families in Telford are living on family credit, which tops up low wages and is paid for by taxpayers. Others have mentioned the real lives of the real people we represent, but I want to tell the House about one of them—a man I met in Arleston in the Wellington area during the election campaign. He is a young man with a young wife and family, who starts work at 5 am and returns home at 6 pm, six days a week. He works a 78-hour week for £150 take-home pay. He has to do that to keep his family and to pay his mortgage, because he does not want to be one of the 800 people a month who lose their homes after having fallen into mortgage arrears. He, and thousands of people like him throughout the country, will look forward to the introduction of a statutory minimum wage.
Then there is the young single parent whom I met in Newport, who desperately wants to work to keep her child but cannot afford to when the only child care available to her costs £3 an hour. She earns £3.60 an hour. She will benefit from the Government's commitment to helping people off welfare and into work.
Then there is the pensioner from Albrighton who was left in pain when his routine operation was cancelled three times because the local hospital could not provide him


with a bed. I am glad to say that I received a letter from him this morning telling me that, although his recuperation was painful, at least he has now had the operation. He can look forward to a national health service being restored by a Government who understand the value as well as the cost of public services.
Next there are the 1,250 children between the ages of five and seven—38 per cent. of the children in The Wrekin, which is well above the national average—who are learning, or trying to learn, in overcrowded classrooms. At last, they will get the opportunity to learn, to grow and to prosper. The one in three people who have been victims of crime in the past two years will feel safer on their streets and in their neighbourhoods because the Labour Government will not just talk tough on crime, but act tough.
As for business in The Wrekin, it awaits with hope and a great deal of anticipation the private-public sector partnership for improving public transport infrastructure which will at last restore the InterCity link to Shropshire. That link was severed in the softening up process leading to privatisation of the railways, which in turn has cost our local economy a great deal in lost inward investment.
Our farmers, too, and the 800 people whose jobs were jeopardised in the past year by the BSE crisis look forward to the new Government's actions with anticipation. They also look forward to the lifting of the beef ban and a resolution, at last, of the BSE crisis. Their neighbours in the countryside are looking forward to the Government arresting rural decline. That will begin with the private sector restoring the lost bus services; rural post offices must be protected, too; and GPs must be encouraged back into rural communities.
Much that has happened in the first month of the new Labour Government has given us great encouragement and hope for the future—not least the ministerial announcement on 19 May, in an Adjournment debate, that minerals planning guidance note 3 will be urgently reviewed. It relates to opencast mining, and the review is probably more eagerly awaited in my constituency than anywhere else in the country. Once in place, it will provide relief to the communities of Muxton, Lilleshall and New Works Village, where lives and properties have been blighted for so long by the threat of opencast mining. I hope that the review will be swift and conclusive.
I also urge Ministers to take a look at planning policy guidance note 3 on social housing, because the planning system, besides housing policies, can deliver social housing of the type that our communities desperately need. Planning can be a great engine of social progress—a fact which I am sure my hon. Friend the Minister has not overlooked.
In my district, 2,553 households are in housing need, and the wait for housing allocation is an average two miserable years. Fifteen million pounds is needed this year for repairs alone, and over the next 10 years about £45 million in further investment is needed to restore our housing stock.
The problem is as great in rural areas as it is in urban areas. It is just as widespread in market towns as in the more densely occupied parts of the constituency. Communities cannot renew themselves unless they provide homes for the next generation: they wither and die. Just as the community that I used to represent in

Millbank has struggled long and hard, and with some success, against Tory housing policies, so rural communities have had their challenges to face.
It is time for the Government to act on housing. Council coffers are said to contain £6 billion; 100,000 families are in housing need; there are hundreds of thousands of unemployed construction workers on the dole. It does not take an Einstein to solve the equation and realise that those unemployed workers should be put back into employment, with money in their pockets to spend in the high street, making a contribution to the local economy and broadening the tax base.
Many brick producers in my constituency will directly benefit from kickstarting the sector and enabling it to build homes for the people who need them. There will also be a net saving to the taxpayer. The Bill will help to redress the balance: alongside the right to buy we must restore the right to rent. That is only common sense and common decency, qualities which have been in short supply these past 18 years. But they are the qualities that won us the recent election.
Let us recognise that without a permanent roof over our heads we have nothing and no chance in life. So let us give those without homes and those struggling to bring up their families in substandard housing both hope and life opportunities. This Bill begins that process, and I have been privileged to make my maiden speech during the debate on it.

Mr. Oliver Letwin: I begin by congratulating the hon. Member for The Wrekin (Mr. Bradley). I agreed with almost none of what he had to say, but he said it eloquently. I am sure that we shall hear many other speeches of equal eloquence by the hon. Gentleman in the months and years ahead.
I pay tribute at the outset to what I take to be the genuine motives of Her Majesty's Government in this matter. Labour Members have said repeatedly throughout the debate that their aims are to increase employment and to improve housing. No one in my party desires anything other than those two results.
The problem with the Bill has been well described by my hon. Friend the Member for Maidenhead (Mrs. May), who was misdescribed earlier as the right hon. Member for Wokingham (Mr. Redwood), a perhaps more famous participant—

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): Not so attractive, though.

Mr. Letwin: No, indeed. My hon. Friend described the Bill as a smokescreen, but I think that the problem goes deeper. The Government's motives, although genuine and noble, will not be realised by the Bill. Three kinds of naivety are at work here. This is a subject which has been debated in the House, by Governments and among learned people on both sides of the political divide for about 25 years. It is not new territory that the Government find themselves occupying today.
The first type of naivety is the belief that, to the extent that the receipts are indeed used by local authorities for housing, they will create long-term sustainable


employment. On the contrary—if Ministers and Labour Members knew rather more than it appears that they know about the housing industry, they would be as aware as Conservative Members are that the effect will be to create what Labour Members themselves sometimes call a boom and bust culture. A one-off release of large sums for building houses will engender a large expansion of the construction industry, but only briefly—to be followed almost inevitably by an exaggerated contraction of the industry. It is that cyclical pattern which has caused so much difficulty for those who have attempted to remain in that industry through hard times and good. Far from creating additional sustainable employment in that industry, the Bill is likely to lead to over-expanded ambitions and subsequent bankruptcies which, if anything, will tend in the long term to reduce sustainable employment in the industry. There are all too many historical examples of that phenomenon—with which officials, if not Ministers, are only too familiar. If the Government were to seek advice from their officials on the matter, I have no doubt that they would receive advice to that effect.
The second species of naivety with which we are dealing concerns the fact that, alas, much of the money will not be used for housing. Although it may be specified that the receipts, if released, must be directed towards housing, as always there will be a large degree of substitution. Following the release of those receipts, local authorities will no doubt find themselves spending in other quarters the money that would have been spent on housing. The Government will be surprised in due course, and they will be obliged to explain to the House why there is so great a discrepancy between the variously reported £5 billion or £7.5 billion of receipts and the amount actually spent on increased funding of housing.
The uses that each local authority makes of that money will depend on the authority. I fear that in the case of some authorities, especially those controlled by the more extreme variants of the Labour party, some of the uses will alarm the Government and may be advantageous, from a purely political point of view, to Opposition Members. I suppose that, from that point of view, I should welcome that likely development, but from the country's point of view, it will not be advantageous. It will not contribute to employment or to the solution of our significant housing problems.
Alas, a third species of naivety is also at work. The one thing of which we may be confident is that although the receipts will not generate the degree of sustainable employment envisaged, and although much of them will not be spent on housing, they will certainly be spent. The history of local authorities over many decades bears out the fact that a local authority that is permitted to spend extra money will always do so. As Conservative Members have frequently said—and it will not surprise Ministers—when that money is spent, the public sector borrowing requirement increases.
The hon. Member for Sutton and Cheam (Mr. Burstow) offered the Government a marvellous device for resolving the problems that would otherwise occur: creative accounting to reclassify the public sector borrowing requirement into two categories—one caused by current spending, the other caused by capital spending. I presume that the hon. Gentleman imagined that by that means

Liberal Democrat magic, allied with Labour perseverance, would lead to a sudden disappearance of the problem of the vast increase in the public sector borrowing requirement in the current financial year.
Alas, even if the Government—contrary, I suspect, to the advice of all those concerned with the probity of public accounts and contrary to the dictates of the Treasury—were to reclassify in that way, they would find that there is an economic reality that when debt increases, interest costs increase. Regardless of whether the extra cost is borne in one year through expansion of the PSBR or is borne gradually over time in the form of increased interest charges, it will be borne.
That extra cost will have to be borne by something else. It will have to be borne by the reduction of other parts of the departmental total or of the global total, in which case other programmes—perhaps those dear to Labour Members—will need to be cut, with consequent effects on, among other things, employment. Or it will have to be borne by an increase in taxation which, such being the way of the world, will not be free of employment consequences. Every time taxation increases, either consumer spending or industrial profit declines, threatening jobs.
The Bill, although noble in its motivation, proves on examination to be a tissue of naiveties. It will not result in a stable increase in employment in the industry to which it is ostensibly devoted. It will not result in an expansion of housing on a scale approaching that which is considered to be the obvious outcome by those who have not examined the position. It will result in a great increase in the public sector borrowing requirement, which will come to bear on all of us in the form of reduced expenditure elsewhere, perhaps on even more urgent services, or in the form of an increase in taxation, which will inevitably reduce employment.
The Government would do well to reconsider the Bill, if theirs is the noble motive of trying to increase employment and to improve housing. Some other Bill, better fashioned, would serve that purpose better.

Mr. David Drew: Thank you, Mr. Deputy Speaker, for allowing me to make my maiden speech in this important debate.
I will start by thanking all those in my constituency who worked so hard to ensure that, after almost 50 years, Stroud returned a Labour Member to Parliament, and all those electors who, having thought long and hard about what was in the area's best interests, voted for a better future. In the process, they overturned one of the safest Conservative seats in the south-west on an unprecedented wave of enthusiasm for Labour's message. I fully intend to do everything possible to live up to the trust that they have placed in me and to fight for fairness and social justice in everything that I do.
As well as being a Labour Member, I am proud to represent the Co-operative movement in this place. As one of 26 Co-operative Members of Parliament, I am sure that we shall make a considerable contribution. It is important to recognise that the Co-operative party is a sister party to the Labour party and that, although we share similar objects, we maintain our separate identities. We shall take every opportunity to pursue co-operation in all its


different forms and we look forward to the early introduction of a Bill that will encourage co-operation in all those forms.
I pay tribute to my predecessor, Roger Knapman, who represented the Stroud constituency for the past 10 years and in so doing achieved the reputation of being "a good House of Commons man," rising to the office of Government Whip. He may have been a person of relatively few words in this place, but he was always known for his mordant wit and his ability to present his case clearly and coherently. He was magnanimous in defeat on the morning of 2 May, which I greatly appreciated, and I hope that I shall be able to follow him with dignity and good sense and serve the area to the best of my ability.
There is one respect in which I would not want to emulate my predecessor. In his maiden speech, he warmly welcomed the introduction of the poll tax. With hindsight, I feel that that did not get him off to an auspicious start. However, in due course it did his chances no irreparable harm because he served as part of the Government.
I cannot leave my tributes without mentioning two former Members of Parliament for Stroud. Sir Anthony Kershaw, who represented Stroud for an impressive 32 years from 1955 to 1987, developed an enduring and endearing relationship with local people, based on his reputation as a highly conscientious Member of Parliament. He also managed to be a high achiever in the Commons, gaining ministerial office and becoming an acknowledged expert in the sphere of foreign affairs. I have been the recipient of good advice from Sir Anthony, for which I was very grateful.
I also pay due regard to the last Labour Member of Parliament for Stroud, Ben Parkin, who served in the 1945 Parliament. On his election, he restored hope and a sense of renewal to the people of Britain after a period of undeserved misery and pain. He went on to represent the interests of his constituents with characteristic commitment and gained widespread respect as a valued parliamentarian. He had a lifelong belief in the need for peaceful international relations, based on a foundation of moral leadership, and in the need for socially useful, productive and fulfilling employment, especially for the young. Those remain laudable objects today, and Ben will be long remembered by many of my constituents for giving a lead to social and moral renewal. London Members will know that Ben went on to represent a seat in the capital for many years and that he is best known for his exposure of Rachmanism.
I am not only extremely proud to represent my constituency but extremely fortunate to represent such a beautiful part of the country. I am not alone in describing my area as such, and the Stroud district has a special resonance for all who know it. It is not just a beautiful place. Over the centuries, Stroud has seen remarkable change. For so long associated with the wool trade, it was at the forefront of the industrial revolution and retains its integral interest in and support for manufacturing. Hon. Members may be surprised to learn that some 40 per cent. of the work force are still involved in manufacturing—a much higher percentage than elsewhere in Gloucestershire and a significant proportion in relation to the whole country. That was brought home to people last week when we experienced the tragic loss of some 200 jobs at one of our major firms, Lister Peters in Dursley.
Stroud's dependence on manufacturing means that we have a vested interest in recovering this nation's secondary base. If we are to succeed in that, we must move away from too great a reliance on the low-wage, low-security jobs that have become all too prevalent in my constituency. Given the Government's priorities of investment and educational opportunities, there could be no better test bed than the Stroud constituency. In wishing the Government every speed in their venture to rebuild this country, the people of Stroud will welcome any initiative that strengthens our manufacturing and engineering base. I am sure that that is the case on both sides of industry. For the reasons that I explained earlier, it is especially important to my constituents.
My constituents are lucky to live in such stunning countryside. The constituency consists of Cotswold Edge and the Severn Vale. It has two major market towns: Stroud in the north and Dursley in the south. There are four other market towns: Minchinhampton, Nailsworth, Berkeley and Stonehouse, where I live. It has been my great pleasure to represent Stonehouse over the past decade as a town, district and county councillor. As an apprenticeship for this place, I am sure that the experience is second to none. In addition to the market towns, there is a rural hinterland with sizeable parishes such as Cam, Cainscross and Rodborough, as well as many smaller villages and hamlets too numerous to mention.
The strength of our area is in its diversity. However, we face an increasingly uncertain future. Like the rest of the country, Stroud has suffered from a free-market approach to planning, which has seen the hearts of towns and communities eroded by the interests of developers and the restraining of local government powers to act in their communities' interests. At this very moment, developers are preparing to build numerous houses on some of our most precious green-field sites, ignoring the needs and wishes of local people and failing to take account of the economic and environmental consequences of their actions. I have referred more than once to the "locust" tendency of taking up more and more of our precious countryside and the "lemming" effect of failing to question whether that is right or fair. I intend to initiate a full debate on the whole development process so that we can genuinely move towards a more sustainable future with much more carefully thought-out strategies.
Stroud has achieved some notoriety of late, with an intervention by the former Secretary of State for the Environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer). In visiting my constituency over the past week through the columns of various publications, he was rather rude about Stroud district council's attempts to put forward proposals for consultation in its local plan. His views were at best unhelpful and his words have done nothing to prevent the attack by developers. If he had spent more time talking to developers to try to restrain their ceaseless attack on those green-field sites, it might have been more helpful than having a go at what we are trying to do in Stroud. As I am not allowed to be controversial in my maiden speech, I shall return to that matter later.
Hon. Members may wonder what all this has to do with a debate on capital receipts, but I understand that I am allowed a certain licence in my maiden speech and I shall return to that issue later. I wish to discuss three other matters before coming to the capital receipts implications for Stroud and the rest of the country.
First, my constituency has suffered from a financial and democratic deficit. Services have declined and council taxes have risen at both county council and district level, despite a rapid increase in population caused by a standard spending assessment system that is rigged against us. My colleagues from Gloucestershire and I intend to turn that round so that we can provide better education, good transport and a proper community infrastructure.
The second issue concerns the campaign to save Standish hospital from closure. I have long supported the campaign and hope that, as a Member of Parliament, I can bring it to a successful conclusion. To my constituents, Standish exemplifies what the NHS is all about. I have pledged to continue to battle to keep the site and have already begun discussions to ensure that that happens.
The third issue is more complicated. It involves my horror at the increase in poverty and social exclusion in my area. Many hon. Members, particularly Labour Members, may question that comment, as deprivation in their areas may seem more commonplace. However, there are surprisingly large pockets of poverty in Stroud. Like many other areas of the country, we have problem estates. Just as worrying is the increased incidence of rural poverty. While we know much about urban poverty, we have yet to grasp what it is like to be poor in a rural area. Problems caused by poor transport, lack of jobs and absence of shops and services are all too prevalent and are all wrapped up in social isolation. It may seem a paradox that anyone can feel hopelessness and despair when living in a rural idyll, but the aphorism, "You can't eat the countryside" sums up the reality that far too many people face.
Against that background, I have little difficulty in moving on to the substance of the Bill and I am particularly pleased to make my maiden speech in a debate on local authority capital receipts. I have a long association with, and specific interest in, housing issues. The restriction on the use of capital receipts from the sale of council houses has long caused anger and resentment in all housing authorities. My authority has more than 6,000 properties, many of which are in a good state but some of which need repair or bringing up to date, such as the installation of central heating or better windows. It is vital that that should be done and anything that can help it on its way will be welcomed.
Like many other areas, Stroud also has a high percentage of poor quality housing in both the private and the public sectors. Much of it dates back to pre-1919, so it is in considerable need of repair. There are therefore good reasons why local authorities should be able to use those capital receipts. It is a disgrace that while homelessness rose inexorably under the Conservative Government, a major source of funding was proscribed. Had those moneys been made available over time, I wonder how many families and individuals who have suffered the inequity of homelessness would have been housed without having to face the despair and uncertainty of waiting in bed-and-breakfast accommodation or even worse. Stroud has managed to avoid the use of bed-and-breakfast accommodation, apart from on rare occasions. On the positive side, we have an estimated £5 million in the form of cashback which, if used sensibly, could make a real hit in attacking poverty and deprivation.
As democratically elected bodies, local authorities should have the right to decide how they allocate their funds. Too often, the Conservative Government's first response was to restrict councils from exercising their authority. In so doing, they not only sought to frustrate councils' genuine wish to provide good quality services but created a complexity in local government housing finance which few people would purport to understand. That is especially true in relation to capital receipts. I hope that my hon. Friend the Minister will aim to cut through the complexity so that it will be easier for local authorities to understand the mechanism and, accordingly, for electors to measure their performance.
Several Conservative Members referred to debt. No one is in favour of local authorities delaying repayment indefinitely or failing to make it a priority, but it is not beyond the wit of local authority treasurers to take responsibility for that, in liaison with their councillors. It is wrong and counterproductive to impose repayment of debt, without giving discretion. Rather than saving money, that can lead to a loss of revenue in the long run, through the absence of housing provision and other creative uses of receipts.
Councils should be allowed over a period of time to use their capital receipts from the sale of council housing. It would be foolhardy for authorities to try to use all of the receipts in one go, or even to frontload the receipts, no matter how desperately they wanted to tackle housing problems in their area. The impact on rents and council tax would be unacceptable, as Conservative Members have made clear. I know that the Government will take that carefully into account in their calculation of subsidy support and subsequently of SSAs.
Instead of rushing into the use of their receipts, local authorities should work out the best schemes possible, preferably through a partnership approach, to maximise the value accruing from the receipts. There will be a temptation to restore the cuts of one third in capital which the previous Government imposed, but that must be resisted in the short run, at least.
I wanted to know from my hon. Friend the Minister how the release of capital receipts will affect supplementary credit approvals. I am happy with her response, and even more pleased that there will be a period of consultation on the way in which the details of the scheme will operate. That takes account of the prerequisite for fairness to authorities such as Stroud which have managed their capital assets so successfully over the years.
In conclusion, I return to the link between the growth of social housing and the possible attack on the countryside. Seeking the building of extra social housing may seem to be at odds with my earlier plea that we must end the destruction caused by green-field development, which hangs like a pall over much of my constituency. There is, however, no contradiction. I am not against development per se: I am against the imposition of unbalanced and unacceptable development.
For example, in many cases the only housing that is needed in a particular place is more social housing. It is my contention that if local authorities were given back the resources to provide more social housing, that could prove helpful to those of us who favour greater constraints on development. If social housing will be required in the future, more capital should be available in the public


sector to initiate that development, thus restoring the balance between public and private sectors. I heartily support the views of my hon. Friend the Member for The Wrekin (Mr. Bradley), who said that we must look again at planning policy guidance PPG 3, which would be a means of achieving that objective.
Too often, the only way in which social housing can be commissioned at present is on the back of much larger estates through planning gain. That is, at best, undesirable.
I support the Bill. It is clearly set out to deal with the problems of homelessness and of renovation and refurbishment, and it provides a helpful link with welfare to work schemes. Most of us went into politics to try to raise the quality of life of those whom we represent, and the Bill will do much to further that aim.

Mr. David Watts: I congratulate the hon. Members who have made their maiden speeches today. I am grateful for the opportunity to make mine in such an important debate.
My interest in local government goes back many years. For the past 16 years, I have served as a member of St. Helens council and have held several positions, including chairman of education and of economic development and, for the past four years, leader of the council. I have also served on the local government consultation finance committee. I therefore have some knowledge and experience of the problems faced by local authorities.
Before I deal with the problems of local government finance, I shall say a few words about my friend and predecessor, John Evans, and my constituency, St. Helens, North. John was first elected to Parliament in 1974 as the Member for Newton, which at the time was one of the largest constituencies in the country. Following the boundary reviews of 1983, the seat disappeared. John was soon selected and elected for the new seat of St. Helens, North, which he held from 1983 to 1997.
John has many friends inside and outside the House. He has built up an excellent reputation as a constituency Member of Parliament and as a fighter for the rights of the people of St. Helens. He will also be remembered by his political colleagues for his work on the national executive of the Labour party, where he helped to rebuild the party and its finances. I know that John takes most pride in his role in leading the national campaign to stop the takeover of Pilkington by BTR. That successful campaign kept the world headquarters and its plants and jobs in St. Helens.
John was a hard-working Member of Parliament, with many achievements to his credit. He was proud to represent St. Helens, North, and the people of St. Helens, North were proud to have him as their Member of Parliament. We were delighted when John's efforts and hard work were recognised and rewarded with his elevation to the other place. I take this opportunity, on behalf of the people of St. Helens, North, to thank John for his 23 years of hard work and to wish him and his wife, Joan, every success in their new roles.
St. Helens is an industrial town, built on the back of the coal, glass and chemical industries. It is famous for its glass technology, its Beecham's powders and, of course, its rugby team. However, the town's industrial past has left it with its share of problems—large areas of derelict land and a low skill base.
The local authority has been at the forefront of building a partnership between the private and the public sector. That partnership is now regenerating the town. Despite the loss of more than 10,000 jobs in the past 10 years in the coal, glass and chemical industries, new industries and jobs have been created. Recently, it was announced that a multi-million pound indoor ski centre would be built in the Haydock part of my constituency.
The local authority has managed to raise education and training standards above the national average, and has reclaimed half the derelict land to which I referred. That has created an improved environment, new development sites and new jobs for the people of St. Helens. The partnership has achieved that success despite the fact that St. Helens does not receive its fair share of national resources. It has been able to maintain its spending on education and social services only by becoming one of the most efficient and effective local authorities in the country, and by cutting other important council services and increasing council tax above the national average.
I put on record my support for today's announcement of the release of capital receipts held by local authorities. It is a national scandal that local authorities have been forced to hold such capital receipts in their bank accounts and that construction workers have been left on the dole, while many families in towns such as St. Helens are forced to live in substandard housing that is often cold, damp and lacking in basic facilities.
Many communities and local authorities will welcome today's announcement, which will allow councils and the private sector to begin the job of bringing homes up to a modern standard. It will also encourage the recruitment and training of the long-term unemployed, as part of the Government's welfare-to-work scheme.
Hon. Members have said that the Government's proposals go no way towards dealing with the problems that exist in the United Kingdom. I am sure that that is true. My local authority needs more than £100 million to be spent on the modernisation of its pre-war stock, and it has only £12 million in capital receipts. It normally has a national allocation of about £3 million a year to spend on those houses. It does not, therefore, need a genius to see the scale of the problem that exists in my borough.
Today's announcement shows Labour's values and it shows what Labour will do when resources become available. I am sure that the announcement will be welcomed by many people who will enjoy the benefits of today's allocation being released. I am hopeful that not only shall we have a radical review of capital receipts, but we shall have a radical review of SSAs. Such moves will focus attention on the unfairness of the present SSA system.
The Government were right to release some of the capital receipts held by councils. I was pleased to hear of last week's commitment to improve education standards by cutting class sizes. However, if we are serious about giving our communities equal opportunities in terms of receiving good-quality council services, we need to review the SSAs as well as the capital allocations that local authorities receive.
The Government should not be sidetracked by vested interests. Communities such as St. Helens should not have to wait for ever for a fair grant system. St. Helens is aware that the new Government have inherited a financial crisis.


We are not expecting a larger local government cake, but we are expecting a fair slice of that cake to be given to towns and cities such as St. Helens.
I shall give the House a few examples of how unfair the present system is. St. Helens and Westminster have the same population. St. Helens receives £583 of grant per person, whereas Westminster receives £995 of grant per person. Each Westminster secondary child receives £983 more grant than each St. Helens child receives. Each child at risk receives £19,000 more grant and each elderly person receives £418 more grant. Those figures are in addition to other aspects of the SSA system which are unequally unfair to my constituents. Such figures are staggering and other local authorities—Wigan, Barnsley and Rotherham, to name but a few—face similarly unfair treatment.
St. Helens does not mind receiving less grant than poorer areas, but Westminster has less unemployment, fewer problems of poor health, less poverty and a higher average income. Those facts speak for themselves and demand change. Until such changes are made, the people of St. Helens will continue not to receive their fair share of national resources, they will face further cuts in council services and they will face higher council tax bills than they should. More important, they will not be able to invest in their communities in the way that they wish and as they are entitled to do.
I welcome the Government's commitment to reviewing local government SSAs and I welcome today's announcement. The people of Great Britain have made the right choice in electing a Government who will invest in their future.

Ms Maria Eagle: I am grateful to you, Mr. Deputy Speaker, for allowing me to make my maiden speech in this important debate. I am particularly happy to be able to congratulate my hon. Friend the Member for St. Helens, North (Mr. Watts) on his first contribution, and I am sure that we shall hear many more contributions from him.
Garston is positioned to the south of most of the well-known Liverpool landmarks, and it is a mixed residential and industrial constituency. It includes some of the docks and the old industrial heartland of the city, much of which was devastated in the early 1980s. Were I to list the factories and employers who have gone from my constituency, it would be a depressingly long list. Liverpool, however, is irrepressible and the people are of the best sort. There are encouraging signs of hope and renewal, especially in the single regeneration budget partnership areas of Speke, Garston and Netherley valley.
Garston's borders are logical on three sides—the River Mersey, the green belt at the southern edge of the city and the M62. The border on the fourth side runs almost down Queens drive, but not quite. My constituency is perhaps the most socially and economically diverse of all the Liverpool seats and as such, it has always been a volatile swing seat. It used to be a true marginal, but it has lately swung strongly to the Labour party. Although I might like to think that that phenomenon coincides precisely with my appearance on the scene, in fact it predates it. Garston's progress to an 18,000-plus Labour majority has been aided enormously by the slow death of the Tory party in Liverpool.
Whichever of the two—the right hon. and learned Member for Rushcliffe (Mr. Clarke) or the right hon. Member for Richmond, Yorks (Mr. Hague)—who are vying to be Leader of the Opposition is successful in grabbing that poisoned chalice, he might profitably reflect on how his party can ever again be relevant to the people of my constituency. If he finds an answer, he may well be on the way to renewing his party. As recently as 1979, Garston was held by the Conservative party, but now it is a very distant third.
Garston contains some of the most desirable and expensive housing in Liverpool, in the Woolton and Allerton areas, and has the highest proportion of owner-occupation in the city, but it also has huge peripheral estates in Netherley and Speke and some very poor private terraced property in Garston, some of which is unfit for human habitation. Unemployment is well above the national average and all indices of deprivation show Liverpool to be very poor—one of the poorest regions in the European Union. Large swathes of my constituency suffer the problems associated with unemployment and poor housing—poverty, ill health and crime, to name just three—yet the community spirit is strong.
Throughout the constituency, community-led groups and businesses have sprung up to try to tackle the problems—whether by way of credit unions taking banks to the estates, such as those in Netherley and Speke, long since abandoned by commercial institutions, or by way of employment and regeneration initiatives, the list is almost endless. SMART, ARCH, CREATE, VANT—I could go on for many hours about the good work of those organisations in my constituency, but time is short. Suffice it to say that the capacity of the people of Garston constituency to fight for improvements and life chances for themselves and their families is endless and inspiring.
Despite the efforts being made, however, regeneration is never an easy task. Some basic problems must be tackled by the Government, and I shall address one of the most basic problems in my constituency, which the Government can and should tackle—the provision of adequate housing. First, I want to refer to three of my predecessors—Eddie Loyden, David Alton and Sir Malcolm Thornton. All have represented part of my constituency and all left this House on 20 April or 1 May.
Many hon. Members on both sides will recall Eddie Loyden as a modest man, but a determined fighter for his constituents and for his strongly held socialist beliefs. A seafarer and a docker, his fight on behalf of the families of the victims of the MV Derbyshire typifies him. I know that hon. Members will join me in wishing him a long and active retirement.
David Alton was another respected representative of the Grassendale ward of the Garston constituency. He has now gone to the other place where, I have no doubt, he will continue to speak up for Liverpool.
Sir Malcolm Thornton, who left this House at the behest of his constituents in Crosby rather than of his own volition, was the Member for Garston between 1979 and 1983, so I ask the indulgence of my hon. Friend the Member for Crosby (Ms Curtis-Thomas) if I make some remarks about him. Our paths crossed in 1992, when I fought Crosby for Labour while Sir Malcolm Thornton fought it for the Conservatives. I came, as I recall, a rather glorious second. I recall seeing Sir Malcolm again on


2 May 1997 after his shock defeat. He was as courteous and gracious in defeat as he had been in victory five years previously. I am sure that all hon. Members wish him well in his future endeavours, whatever they are. I certainly wish all my predecessors well.
Something else all my predecessors and I share, apart from having had the honour of representing Garston, is that we have all made maiden speeches about housing. That illustrates how, across party and through time, the issue has been so important in Garston. It still is.
Council housing in Liverpool is, in the main, very poor. Of more than 45,500 dwellings, almost 27,000—over half—are structurally substandard or in poor condition. Much of the stock is ill maintained, some of it designated defective under housing defects legislation, and some which is defective has not been designated. The local authority estimates that £700 million is required to bring the stock up to standard. The standard in Liverpool council housing for heating is one gas fire. Damp, disrepair, mould growth and the consequences for the health and well-being of the occupants are endemic throughout the stock. Those consequences include needless and difficult additional burdens for thousands of my constituents who already have many other burdens to bear.
I know about this, not just because 80 per cent. of my constituency case load relates to housing problems, but from my experience before the election as a solicitor in private practice in Liverpool, specialising in housing law. During my time in the House, I want to achieve an improvement in living conditions for those in the poorest housing. Before my election, I used the courts—civil and criminal—to achieve that for those who sought my help. Now I shall use legislation. However improvements are achieved, they are long overdue.
In her maiden speech in 1945, Bessie Braddock—a well-known Liverpool Member of Parliament whom I feel I can cite because she had a connection with Bennett street in Garston—told of families of 10 in her Liverpool, Exchange constituency who were forced to live in overcrowded conditions. At my first constituency surgery after the election, I was consulted by a constituent who complained that she and her family of 10 were overcrowded in their home in Speke, yet she had no immediate prospect of adequate housing. Little seems to have changed in Liverpool.
We must do something about that state of affairs. That is why I welcome and support the Bill. It begins to tackle the housing crisis that has been worsened by the dogma of the Conservative party and bequeathed to the nation. It makes provision for the Secretary of State to take into account capital receipts set aside for debt redemption when issuing supplementary credit approvals. That sounds dry and technical, but it will get some of the £5 billion of locked-up set-aside capital receipts back into the equation for rebuilding and rehabilitating social housing. The measure is long overdue, delayed purely by the previous Government's prejudice against social housing.
In Speke and Garston, in Netherley and Childwall valley, we need repairs and improvements to houses—and soon. I welcome other initiatives that the Government are supporting, such as establishing housing companies and mechanisms to involve tenants. I believe passionately in the strength, sense and ability of ordinary people to shape and transform their lives, given half a chance. I have

a particular belief in the capacity of Liverpudlians to do that. Their solidarity, community spirit and adaptability are demonstrated every day on the estates to which I have referred. Let us ask them what they want to do, and listen to the answers.
Landlords, even social landlords, do not have a monopoly of wisdom—certainly not in Liverpool. The best of them would not claim to. I hope that, with the backing of the Government, determined to make a difference in Speke and Netherley, things will change. The Bill is a good start. Perhaps we can then ensure that the next hon. Member for Garston—who, I trust, will not come to the House for many a long year—will be able to choose a different subject for his or her maiden speech.

Dr. Ian Gibson: Thank you, Mr. Deputy Speaker, for giving me this opportunity to make my maiden speech. I congratulate my hon. Friend the Member for Liverpool, Garston (Ms Eagle) on her passion and commitment to her constituents and her obvious commitment to politics. I also commend all the other maiden speeches that we have heard today.
I am indebted to the voters of Norwich, North. The 1992 election was a tense fight, which we narrowly lost by 266 votes. We overturned that safely this time. I am grateful to the voters for their support. Norwich, North comprises the northern reaches of the fine city of Norwich and parts of Broadland—Sprowston, Taverham, Thorpe Marriott, Drayton, Hallesdon, Old Catton and Thorpe St. Andrew. People there face similar problems to those in other parts of the country—problems of access for the disabled, low pensions and housing problems. They have spoken for a change, a secure future and a Labour Government.
Previous tenants of my seat—although the boundaries seem to move wider still and wider—were Labour peers George Wallace and David Ennals. Patrick Thompson held the seat for the Conservatives from 1983. I shall not elaborate on their contributions. Many hon. Members on both sides know about them. They were revered and are still thought of as hard-working Members of Parliament. Patrick Thompson established a base for science and technology here in the Palace of Westminster. Coincidentally, my last job before 1 May was as dean of biological sciences at the University of East Anglia in Norwich.
The people of Norwich have experienced major upsets in recent years: shoe factories have closed; there have been job losses at Her Majesty's Stationery Office; the Nestlé chocolate factory closed; a library burnt down; new ventures such as the Playhouse theatre are struggling to survive; and large areas where factories once stood are derelict. Even the Norwich Union, which we hear about in the papers, can no longer offer every school leaver a place, as it once did. The recession came late to Norwich, but it certainly came.
The city has 53,000 houses, 37 per cent. of which are council owned. Some 33 per cent. of those are pre-war, with 1,500 needing immediate modernising. Unless we have more capital investment, not all the pre-war houses will reach modern standards—without outside toilets and with modern kitchens and bathrooms—until 2011. By that time, 6,000 houses built between 1945 and 1964 will need major investment. It is a disgrace that these days we have to give out such facts.
Heating systems are deteriorating faster than we can replace them and many houses do not have full central heating. For years, we have been able to install central heating only for those with a medical priority or for the elderly. That pattern is repeated across the country. Some 5,000 past-war houses need new windows.
Norwich's housing stock is in better condition than that in many metropolitan areas. That is because of good management by successive Labour councils. I am proud that Norwich city council is still controlled by Labour, with not a Tory councillor. That is a great reflection of the vision and determination of Labour politicians throughout the years. The majority of our tenants want to remain with the council. In contrast, many in the Broadland area find that rising rents are becoming intolerable.
Visiting sophisticates from other parts of England have often come to Norwich, chiding us with comments such as, "They can't read, they can't write, but they can drive tractors." Have those people ever produced a son who can teach the Chancellor of the Exchequer to understand and talk with authority about post-neoclassical endogenous growth theories? Norwich has been running the country.
The future of the outskirts of Norwich depends very much on a large research park, where science and technology will flourish. We are trying to build on a model similar to the research triangle park in North Carolina, where massive private sector investment associates with a dynamic public sector grouping of research establishments. We hope that it will result in a successful scientific and economic venture—a true synergy.
The project is developing with the University of East Anglia, where research gradings have risen since the last research assessment, the John Innes Institute, the Central Science Laboratory, the Institute for Food Research and the British Sugar Laboratory. Some 1,700 researchers and teachers investigate links between diet and cancer, undertake genetic engineering of plants and look into the molecular biology of human diseases. Those institutes are soon to be joined by a new hospital.
I should like serious consideration given to the siting of a food standards agency in such a galaxy of talent. To add to that we have Colman's food factory, famous for its drinks and its mustard. Norwich City football club can now boast Delia Smith on its board. We certainly take our food seriously in Norwich.
I want to pay tribute to the people of Norwich. The work that I have been engaged in for several years has had support from charities for carrying out cancer research, particularly from the Big C Norfolk and Norwich charity and the Bryan Gunn Childhood Leukaemia Appeal. Bryan Gunn is the Norwich City goalkeeper. With the help of people who can ill afford it, those charities have raised money to help our research at the Francesca Gunn laboratory, where we are looking for new diagnostic techniques for cancer detection and for new cures. It says a lot for people that, when times are hard, they are prepared to give to charity and help the development of new cures. We owe a great deal to people who live in poor housing, but are prepared to help others.
I conclude with a few comments about general housing needs in Norwich. Although they are not so different from those in other parts of the country, I wish to raise one or two specific points.
Before the right to buy was introduced, Norwich city council had 26,000 houses. It now has 19,500. We urgently need to tackle overcrowding, problems with neighbours and the long waiting lists for transfers. Those complaints are made time and again in my surgeries. Requirements for the elderly, special needs housing and homelessness have also been mentioned today.
Norwich has £6.5 million in capital receipts. If £2 million of that were released, we could increase modernisations and carry out external repairs, re-roofing, repairs to lifts and improvements in security. That would make a start, but we need a rolling programme for at least 10 years. Tenants would certainly have better heating and lower heating bills.
If another £1.2 million were released, we could start building in association with housing associations and private builders. It is all rather exciting. It starts the ball rolling and shows the direction in which we are moving. Constituents in Norwich would like that to happen and that is why they support the Bill. It offers a pathway for change and it leaves me rather excited.

Mr. Anthony Colman: I thank you, Mr. Deputy Speaker, for calling me to speak in the debate. I also congratulate the hon. Members who have made their maiden speeches today, including my hon. Friends the Members for Liverpool, Garston (Ms Eagle), for Mitcham and Morden (Ms McDonagh) and for Norwich, North (Dr. Gibson). I shall return to the speech by my hon. Friend the Member for Mitcham and Morden in a moment.
I particularly commend the speech by my hon. Friend the Member for Norwich, North. With a name such as mine, I am obviously pleased by the fact that he mentioned mustard and the money that was raised by what people left at the side of their plates. I also endorse his support for Norwich City.
As a Norfolk boy, it is nice to see Norwich once again returning Labour Members. Norfolk, North, where I grew up, always returned Labour Members in the 1940s and 1950s, and I look forward to that happening again at the next election.
Turning to the Bill, I speak from a background of two different boroughs—Merton and Wandsworth. Until very recently, I was proud to serve as leader of Merton council for some six years and I am pleased to represent in the House the residents of Putney in the borough of Wandsworth.
My hon. Friend the Member for Mitcham and Morden was perhaps unable to refer to her great success as chair of the housing committee of the London borough of Merton. During her years in that post, the Labour group, working with local housing associations, was able to build more than 3,000 units of social housing. Obviously, during that time we were blocked from using the capital receipts, and much more needs to be done.
In Merton, particularly in Mitcham and Morden, there is great housing need. The Bill will enable the people of Mitcham and Morden as well as those in Wimbledon to benefit from the same standard of housing as 3,000 of them have received under a Labour council since 1990.
In contrast, the London borough of Wandsworth has a housing waiting list of some 7,000, although its capital receipts amount to millions of pounds. I say that because I am unable to trace from either the chief executive or the director of finance the exact sum. They seem to be a little reticent about that. I know that some of those receipts have been used to repay debts, but money is still available. That money should be spent on addressing the great social housing needs of the borough and the equally great need for repairs.
Many of us know of the tremendous campaign in Wandsworth to sell council houses. To those who wish to buy their council houses I say God bless them. If people wish to do so, we should let them get on with it. However, I draw the House's attention to my constituent who received a 25-year mortgage at the age of 78. Now, at the age of 86, she faces huge bills, large service charges and large capital charges amounting to more than £10,000. That is not what was meant by the right to buy. Councils encouraging people in that respect should draw a line somewhere. The block where my constituent lives needs repairs, including a new roof and new windows. It should be one of the first calls on the capital receipts that will be released through the Bill.
At my surgeries, I meet many leaseholders who are concerned about what they consider to be the mis-selling of their properties to them. I am not suggesting that Wandsworth has done anything illegal. The council stayed on the right side of the law, as was established by the Audit Commission before Christmas, so I am not making any allegations of that nature. However, many unhappy leaseholders and tenants in Wandsworth are looking to the Bill as a way by which the money that has been put into council coffers can be released to pay for repairs and new social housing.
Next May, the residents of Wandsworth will have the chance to decide the political balance of their local authority. Obviously, I hope that they will take account of the Bill and realise the difference between Labour and the Conservative policies and attitudes towards repairs and new social housing.
Merton and Wandsworth are very different councils. One is Labour and one is Conservative. On 1 May, the British people decided which way they wished to go and the Bill is an important part of their decision.

Mr. Nick St. Aubyn: I am grateful for the opportunity briefly to intervene in this important debate. When I served on the housing committee of a London council serving residents in Paddington, we had 24,000 tenants on our books. One has only to say that number to realise how difficult it is for any local authority with large numbers of tenants to manage them as effectively as can a smaller and more focused range of housing associations and private sector providers that can give a better quality of housing provision.
Although a new Labour Government were indeed elected, as the hon. Member for Putney (Mr. Colman) pointed out, they promised to privatise, to follow our policies on privatisation and the private finance initiative and, indeed, even to accept private funding of the railways. The Bill's thrust goes entirely against that logic and the logic of what the previous Government did, which the electorate endorsed time and again.
When a local authority gets involved in business, it never does so that well. When it gets involved in negotiating the purchase of land, in construction contracts for new building or in the management of housing estates, it is highly unlikely that it has the ability, the management or the focus to do the job as effectively as the private sector. Instead of encouraging an increase in the public sector borrowing requirement, we should be encouraging more investment by housing associations in order to get the extra housing that we need.
We should also be encouraging new investors in housing. The previous Government ensured that the rent laws became more even handed and fairer, and enabled great expansion. [Laughter.] The Under-Secretary of State laughs, yet the previous Government ensured a great expansion of the private rented sector, which had been in terminal decline under the previous regime of protected rents. We should build on that by encouraging new investors such as pension funds to get directly involved in providing social housing—if necessary through an element of subsidy, just as we do on some transport lines. We should follow through the logic of involving the private sector in housing rather than returning to the local authority control that many Government Members have mentioned.

Mr. Bob Blizzard: Why does the hon. Gentleman see the situation as an either/or option? The council that I led over the past six months took both routes. We worked with the private sector and housing associations, but sought to improve our own stock. Of the 6,000 homes that are still council run, half of them have no central heating and only a fifth have double glazing. For every £1 million released under the Bill, about 250 of those homes can be fitted with double glazing and central heating. That will be good for energy efficiency, jobs and business, but it will also improve the tenants' quality of life. Why does the hon. Gentleman want to deprive those tenants of benefiting purely on the dogmatic ground of wanting only to go down the private route?

Mr. St. Aubyn: Of course I do not want to do that. I want the quality of housing—whether it is in the public or the private sector—to be improved. The point is who is best able to do that. If the Bill were limited to improving tenant accommodation, it might make a little more sense. In privatising parts of the country's assets, the previous Government became involved in improving those assets and their management before they were passed to better management in the private sector.

Mr. John Hayes: Does my hon. Friend recall the very sad and poor record of many Labour local authorities on maintenance and repair of council housing and Labour's bitter opposition over many years to the right to buy? Are his fears about what the Bill might lead to based on those memories, which seem to have been passed over or easily forgotten by Labour Members?

Mr. St. Aubyn: My hon. Friend makes a very good point. We have heard Labour Members comment on certain Conservative councils and how they tried to do their best for their tenants and their tenants' children in their areas, but we must not forget that the Labour Minister Herbert Morrison, who formerly ran London


county council, talked of building the Tories out of London. It is no coincidence that one of the people behind the Bill is a descendant of Herbert Morrison. I fear that the same thing that went on then is going on today, and we shall oppose it.

Mr. Paul Truswell: I am grateful for the opportunity to make my maiden speech in this very important debate.
There is a saying that goes: "When Pudsey is strong, Yorkshire is strong, and when Yorkshire is strong, England is strong." Admittedly, the comment was about cricket. After all, Pudsey is the birthplace of Herbert Sutcliffe, Len Hutton, Ray Illingworth and many other famous Yorkshire cricketers. Following the general election result on 1 May, I like to think that that statement carries a certain topical political resonance.
Labour took the seat of Pudsey for the first time in its history after a Conservative reign of 75 years. My predecessor was Sir Giles Shaw. I have noticed with some humour that some new hon. Members have felt obliged to engage in a certain amount of psychological gymnastics in order to pay tribute to their predecessors. Thankfully, I have no need of such contortions. Sir Giles served the constituency extremely well for 23 years. He held ministerial office and, at one stage, he was even a pretender to the Speaker's throne. His most immediate, disarming and deceptive characteristic was his size. He was, as they say, vertically challenged. I suspect that not even his best friends would claim that he was the personification of the principle that small is beautiful. That fact used to cause some merriment when we appeared together. There were the usual predictable quips about little and large, and one wag even suggested that the swing to Labour in Pudsey was 13.8 inches rather than 13.8 per cent.
What Sir Giles lacked in physical stature, he more than made up for in the presence that he brought to his role as a Member of Parliament. He was a compassionate, middle-of-the-road, one-nation Conservative. I realise that many in the present Conservative party regard those descriptions almost as expletives, but I hope that Sir Giles does not. If he does, I can seek refuge in the protection of the absolute privilege of the House. I wish Sir Giles a long, happy and, above all, healthy retirement.
I shall not claim, as other hon. Members have done for their constituencies, that Pudsey was God's best attempt at creating a garden of Eden in England's green and pleasant land. However, it is an attractive part of the world. Many people choose to move there and few choose to leave. It is also the gateway to Ilkley moor and the Yorkshire dales. The millstone grit from which much of the area is built is a reflection of its character. Its communities are fiercely proud and independent. The constituency contains Pudsey itself and the towns and villages of Farsley, Calverley, Horsforth, Rawdon, Yeadon, Guiseley and Hawksworth.
Pudsey constituency also sports one or two household names besides its cricketing greats. Harry Ramsden's, for example, is my corner chip shop. The company started from a tiny wooden shack 50 or 60 years ago. The shack is still there, and the company has exported fish and chips

to the known universe. Across the road, is the Silver Cross pram factory. It is probably fair to say that many hon. Members were transported in Silver Cross prams—my hon. Friends by their parents, and Conservative Members, no doubt, by their nannies. Talking about being pushed around, I note that several Opposition Members have taken to calling new Labour Members voting fodder. All I can say is that we do not feel half as chewed up as the many hundreds of Tory candidates whom we defeated on 1 May.
The Bill that we are discussing is very important. It is about investing in our communities, which have sadly lacked such investment in the past 18 years. We need investment in child care and education, and the money released from the abolition of nursery vouchers and assisted places will start that process. We need investment in our NHS, and releasing money from the internal market and enabling the private finance initiative will start that process. Incidentally, I look forward to the rebuilding of Wharfedale general hospital being on the list of such projects.
The area that has perhaps been most starved of investment is public housing. My council tenant constituents believe that the previous Government not only neglected them, but almost despised them. The Bill will help to reverse that neglect. It will start the essential process of renewal. I should perhaps declare a personal interest. I was brought up in a council house and my parents still live in the same house 44 years later. They, like many millions of ordinary people, are dependent on good, affordable rented housing. They prefer—whatever Opposition Members may say—to live in housing that is publicly owned and administered by the local authority.
In 1979–80, Leeds city council was building 1,200 properties a year. Today, as a result of the previous Government's policies, it builds none. A partnership with the voluntary sector provides some decent affordable rented housing, but nothing like enough to fill the huge void left by the reduction in council house building. In 1979–80, the council received permission from the then Labour Government to invest £100 million at today's prices in its housing stock. That figure has fallen by more than 85 per cent. to about £13 million this year.
Some 20,000 council homes have been sold. That is good news for those who have been given the ability to purchase their home, and one would not want to decry that. However, the properties sold tend, unfortunately, to be the best stock whose rents were used to subsidise the poorest stock remaining in council ownership. It has been estimated that about £750 million is needed by Leeds to put its housing stock in order. At the current rate, that would take more than 60 years, and would not take into account any problems emerging during that time.
When I became a councillor 15 years ago, I was scandalised by the fact that it took a month or five or six weeks to house homeless people. That period has now tripled or quadrupled, and only those with the highest social and medical priorities stand any chance of getting the housing that they need. Linking investment to welfare to work will have other advantages. It will provide the dignity and income of a job, and will enable people to walk down their street, look at local housing and say proudly, "I did that."
My hon. Friend the Minister of State, who has left the Chamber, is a keen student of Leeds' trail-blazing schemes, such as the one-stop shops that she visited a few


days ago. The city council also has a pioneering community building firm, which takes long-term unemployed people and deploys them in building valuable community facilities—the sort of objective we have in mind in releasing capital receipts through the Bill. The community building firm has done some excellent work in my constituency in Horsforth and Yeadon, and it could be a model worth looking at—or, if one will forgive the pun, worth building on.
The Bill offers real hope, but it is not a magic wand—none of my hon. Friends is claiming that it is. It will not repair overnight the neglect of the past 18 years, but it will help stop the rot. On behalf of my constituents, I welcome it.

Mr. James Clappison: I begin by welcoming the Under-Secretary and the Minister of State to their present positions. We have heard some fine maiden speeches from Members on both sides of the House. At times, there has been a sporting theme, but we began with the speech by the hon. Member for Bristol, West (Valerie Davey), who showed her great knowledge of her constituency. She also paid a proper tribute to William Waldegrave, a distinguished Member of this House who gave great public service at the highest levels of government and—as she generously acknowledged—gave great service also to his constituents.
The hon. Member for Bristol, West is clearly familiar with many aspects of the housing problem in Bristol, and I know that Bristol has a high level of housing need. The previous Government extended the rough sleepers' initiative to Bristol. I wish her well in addressing those problems and in representing the constituency which she described as having the second-largest electorate after the Isle of Wight.
The hon. Member for Bury, North (Mr. Chaytor)—a native of Bury—spoke with great feeling about Bury, and he is clearly committed to his constituency. He paid an appropriate tribute to his predecessor, Alistair Burt, who worked extremely hard in government. He was, if I may say so, an unassuming but hard-working character who was popular in this House. He also was a son of Bury, and was very popular in the constituency.
That was the beginning of the sporting allusions, as we heard a great deal about Bury. We then heard from the hon. Member for Stretford and Urmston (Ms Hughes), who said that we would be more familiar with her constituency as the home of Old Trafford. She, too, spoke very well, paying an appropriate tribute to Winston Churchill.
The hon. Member for Harrow, West (Mr. Thomas) paid an appropriate tribute to Robert Hughes, a lively Member of Parliament who made a contribution in many different ways and was, as I know as a near neighbour of his, a most assiduous constituency Member.
The hon. Member for Hammersmith and Fulham (Mr. Coleman) spoke about the housing problems in his constituency. I have some knowledge of those problems, having seen a presentation from the local authority. There are particular problems there, and some poverty, notwithstanding its proximity to central London. The hon. Gentleman spoke knowledgeably, and I appreciated his comments about Matthew Carrington, who was also well respected by his constituents and by the House.
I appreciated the speech by the hon. Member for The Wrekin (Mr. Bradley). His predecessor, John Biffen, would greatly have appreciated the way in which he began his speech, and I wish him well in representing his constituents. He certainly follows a most distinguished predecessor who was a strong House of Commons man. We also heard from the hon. Member for Stroud (Mr. Drew), who made a good speech and paid an appropriate tribute to Roger Knapman, who was also popular in the House and a good constituency Member.
We then moved from football to rugby league, which I enjoy. I appreciated the maiden speeches by the hon. Member for St. Helens, North (Mr. Watts), who spoke well about the problems that concern his constituents, and by the hon. Members for Liverpool, Garston (Ms Eagle) and for Norwich, North (Dr. Gibson). The latter paid an appropriate tribute to Patrick Thompson, who was a most hard-working Member of Parliament and an assiduous constituency Member.
The last Labour Member from whom we heard was the hon. Member for Pudsey (Mr. Truswell), who spoke most appropriately about his constituency. As one who follows Yorkshire cricket, I think that he did justice to the distinguished cricketing antecedents of Pudsey. He paid a generous tribute to Sir Giles Shaw that was accurate in every respect. Sir Giles was a popular and distinguished Member of Parliament and an assiduous constituency Member. The hon. Gentleman made an excellent maiden speech.
The hon. Member for Taunton (Mrs. Ballard) made a good and knowledgeable speech from the Liberal Benches. I appreciate the tribute that she paid to David Nicholson, who took a lively interest in housing matters and would have wanted to take part in this debate had he been here.
The last maiden speech that we heard was from my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). It was an excellent speech, and he spoke forcefully about his constituency and his constituents' interests. I, like him, represent a constituency on the borders of London, in the home counties, with all the tensions that exist there in trying to strike the right balances in planning and transport to get a good quality of life. He showed a real feeling for his constituents' problems and made a telling contribution to the debate on the Bill.
We heard good non-maiden speeches from my hon. Friends the Members for Mid-Norfolk (Mr. Simpson), for Stone (Mr. Cash), for Mid-Worcestershire (Mr. Luff), for South Cambridgeshire (Mr. Lansley), for West Dorset (Mr. Letwin) and for Guildford (Mr. St. Aubyn). A common strand running through those speeches was the large number of questions that the Bill leaves unanswered.
The Bill is in many ways shrouded in mystery. My hon. Friend the Member for Mid-Worcestershire put it appropriately when he said that it was a smokescreen. That reminded me of a description applied by my right hon. and learned Friend the shadow Chancellor to the statement on a comprehensive spending review given to the House by the Chief Secretary to the Treasury last week. My right hon. and learned Friend rightly described that announcement as
a whole lot of smoke and mirrors".—[Official Report, 11 June 1997: Vol. 295, c. 1145.]


If that was smoke and mirrors, this was a bonfire in the hall of mirrors. If the Bill achieves anything, it is to make the comprehensive spending review look like a model of transparency and clarity.
When we consider the history of the pledge that lies behind the Bill, we see why there is a need for so much smoke and camouflage. The Labour party has long created the impression that the capital receipts were standing idle, were not being properly used and were waiting to be unlocked—a sort of pot of gold, an economic free good as my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) said in opening for the Opposition, or a sock under the bed.
It was a common misconception on the part of the Labour party in opposition that the capital receipts were being put to no good use. Certainly, the former spokesman on environment matters—now the Secretary of State for Health—propagated that view. He brought his economic wisdom and powers of analysis to bear on this problem in much the same way that he is bringing them to bear on the health service, with similar consequences. It was certainly the view of the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), who will reply to the debate. He thought that the capital receipts were wasted, were idle and not being used properly and served no good purpose. He imparted that view to Committees.
As the Under-Secretary of State will probably have discovered now that he has entered government, the truth is that the capital receipts have been put to perfectly prudent and proper use. They have been used to service debt and to keep council tax bills and rents down. The hon. Gentleman will now appreciate that. He has had to confess—this is the most interesting feature of the Bill—that there is a direct link between the capital receipts and public expenditure. Every pound of capital receipts released is an extra pound of public spending. The hon. Gentleman has now faced up to that, but he was not prepared to acknowledge it in the past. He did not acknowledge it when he spoke about the capital receipts being wasted.
We need more details about the Bill. My hon. Friend the Member for South Cambridgeshire made a telling point. As he said, it is a shame that we could not have had the consultative paper before this debate. It is a shame, too, that the debate could not have been more co-ordinated with the Budget statement because we need to know how the measure will be paid for.
I asked the Under-Secretary of State to tell us in his reply whether the public expenditure implication will be met from within the budget of the Department of the Environment. Will it be met through a cut in other departmental programmes or will it be transferred to the Treasury? Are we going to have to be told by the Chancellor of the Exchequer that the public sector borrowing requirement will be increased, that there will have to be cuts in some other Departments' programmes, or that there will be an increase in taxation?
What has clearly emerged from this debate is that the Bill is part of a black hole in the Labour party's plans—a black hole between its plans and how they will be paid for. The Under-Secretary of State will have to say a little

more about that in his reply. He will also have to tell us a little more about how the spending of the capital receipts will be phased than the Minister of State did in her opening speech. The hon. Lady said that it would be phased over a prudent period. Can we be told how long that will be? What is a period that is consistent with prudent financial management? Can the Under-Secretary of State tell us when the first tranche will be released? Will it be this year? When will the release take place and how much will it consist of? The hon. Lady is saying that she does not know, but we need to know the answers to those questions if we are to form a judgment on the Bill.
Perhaps the Under-Secretary of State can also tell us how the capital receipts will be released and about the implications for capital receipt rich authorities. We heard from the hon. Lady that there might be an implication for them in the form of what she described as a distribution based one third on possession of capital receipts and two thirds on need. We need to know a little more about that. I am sure that those hon. Members, including Labour Members, who spoke about authorities with capital receipts, such as Vale Royal and Flintshire, will seek reassurance from the Government that their authorities will not be penalised by the mechanism for distributing capital receipts.
What will happen to future capital receipts? We would also like to know more about clause 2, which is bald and bold. As my hon. Friends the Members for South Cambridgeshire and for Mole Valley (Sir P. Beresford) said, it appears to give local authorities a licence to spend and borrow, and to be at variance with prudent financial management. We need more answers on that.
Unless all our questions are properly answered, we will begin to suspect that the Bill, which merely takes into account capital receipts in the allocation of supplementary credits, embodies a bogus policy. The more we hear about it, the more bogus it seems, particularly when we discover that it does not involve the release of an economic free good but more public spending, which will have to be paid for in other ways.
If Labour Members want to know the difference between a bogus policy and one that brings real benefit to people, carried through by a truly radical Government, they could do no better than to consider how the capital receipts arose in the first place. It was largely due to council tenants exercising the right to buy and becoming home owners. Since 1979, in England and Wales alone 1.3 council tenants became home owners. As Conservative Members reminded the Government, Labour local authorities hardly danced with glee about it. That is part of the general extension of home owning since 1979. Those 1.3 million people are part of the 4 million householders who have become home owners since 1979. There has been a significant increase in the proportion of the population owning their own homes, up from 56 to 68 per cent. Those are all things from which we take great credit.
Labour Members would do well to consider the radical ways by which we succeeded in making public money go further through levering in private finance. In her opening speech, the Minister of State tiptoed towards acknowledging the success of many of our initiatives, particularly in talking about partnerships and transfer as the best route for getting private finance into the public sector. She would do well to acknowledge frankly our success with the large-scale voluntary transfer programme


and the £3.8 billion of private finance levered in for 53 local authorities. That is bringing benefit to tens of thousands of tenants up and down the country, including tenants in the very poorest estates, who benefit from the estates renewal challenge fund, the latest round of which in February saw £140 million of public money lever in some £300 million of private finance. Those are real policies, bringing real benefits to people, in many cases people in the greatest need.
Such policies have shown how public money can be used to lever in additional private money and give the best possible value. While the Minister tiptoed towards acknowledging their success, in some speeches from Labour Members there seemed to be a residual antipathy to private sector involvement through large-scale voluntary transfer and to bringing in private money.
We need straight answers to our questions. It may not be the Under-Secretary who can deal with this, but we need an explanation of the financial background to the Bill and its public expenditure implications. We need to know where the black hole is going to be filled in, and a frank acknowledgment that this is not a free good and that capital receipts were not simply being stored away for no purpose. We need a frank acknowledgement that the sums that the Government have presented to the electorate do not add up.
We know that the Labour party, from the Prime Minister downwards, has some difficulty in doing its sums. Those sums seem to have gone spectacularly awry on this occasion: we see an enormous black hole between what the party promised in opposition and what it is now having to do in government. It is leaving us with huge public spending implications. It is time that we had some straight answers to the straight questions that we have asked, and to other straight questions about exactly how the Bill will operate and what further legislation will be needed to make Labour's policy work.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I thank the hon. Member for Hertsmere (Mr. Clappison) for kindly welcoming me to my post. I reciprocate by welcoming him to his, and assuring him—as we have a certain reciprocal interest—that the office that he used to occupy, and the staff who used to assist him, are in good hands and proving extremely helpful to the new Government.
We have had an interesting debate about a subject of the utmost importance: the state of the nation's housing and the urgent need to increase investment to tackle the acute problems of homelessness and poor housing conditions from which all too many of our fellow citizens suffer.
In recent weeks, the former Chancellor of the Exchequer—who we gather is still, albeit marginally, the front runner for the leadership of the Opposition—has claimed that the outgoing Government left a wonderful inheritance. In his closing remarks, the hon. Member for Hertsmere repeated that claim in relation to housing. I shall remind the House of the legacy that was left by the last Government. Nearly 120,000 households were accepted as homeless by local authorities in England last year—more than twice the number when Labour was last in power. We have seen the degrading spectacle of

homeless youngsters sleeping and begging on the streets of our cities, some just a stone's throw from the House. About 1.5 million homes are unfit for human habitation and there is a massive backlog of housing in poor condition that desperately needs modernisation and improvement.
The private housing market is only just recovering from the worst recession to hit it since the war—a recession which also brought repossessions on a scale that has never before been experienced in the country's history. Investment in social housing has been savagely cut in successive years; those cuts have reduced the Housing Corporation's approved development programme by two thirds in the past five years and nearly halved the local authority housing investment programme over the same period. Consequently, the output of new housing for social needs has been reduced to the lowest levels recorded in this country under any Government since the war.
What an appalling record. What a shameful failure. So much for Tory claims of a wonderful legacy.
The truth is that the new Government had to act swiftly and boldly to reverse the disastrous consequences of 18 years of Tory neglect. That is what we have done by presenting the Bill, which honours our clear manifesto commitment to reverse the legacy of neglect and underinvestment in housing by
re-investing capital receipts from the sale of council houses in building new houses and rehabilitating old ones.
Tonight, we begin the process of repairing the damage. Tonight, we begin the process of restoring hope to communities that have been neglected and abandoned. Tonight, we begin the process of restoring public responsibility for our country's housing needs.

Mr. Curry: rose—

Mr. Raynsford: I shall give way to the right hon. Gentleman, although I note that he has been rather absent from our debate this evening.

Mr. Curry: The hon. Gentleman used the phrase "reinvesting capital receipts". Will he explain how the Bill reinvests capital receipts? It does not touch capital receipts; all it does is enable the Secretary of State to take them into account in issuing supplementary credit approvals.

Mr. Raynsford: I appreciate that the right hon. Gentleman has had other matters on his mind for the past few hours. He may therefore have forgotten the clear explanation given by my hon. Friend the Minister of State at the outset of the debate, in which she made it clear that the Bill creates the framework whereby, through supplementary credit approvals, the Secretary of State will be able to reinvest sums related to the capital receipts that had been set aside as a result of the previous Government's decision. We are doing that to achieve investment, to get homes built for the homeless and to move people who are currently in bad housing into decent accommodation.
Tonight, the House has had a good opportunity to debate the implications of the Bill. It has been a wide-ranging debate, remarkable for the number of confident, eloquent speeches from new Members. We


have heard no fewer than 16 maiden speeches, which I suspect might be a record, although others with greater experience may be able to advise me on that. Anyone who is apprehensive about the future of healthy democracy in this country needs only listen to those speeches to know that we have some extremely talented and accomplished new Members in the House. We can look forward to hearing some fine speeches in the years ahead.

Mr. Curry: Most of them will not get another chance until 1999.

Mr. Raynsford: The right hon. Gentleman has had divided loyalties tonight—the debate and events elsewhere. I must tell him that his performance was a little disappointing, but perhaps that was because he was distracted. He started his speech with a rather strange image of my hon. Friend the Minister of State, whom he described as Salome. I am the first to express admiration for my hon. Friend and her great skills, but I do not believe that the image of Salome is appropriate.
If the right hon. Gentleman had thought about it as he unravelled that image, he would know that Salome's only real claim to fame in history and literature is that her opponent managed to lose his head. I hope that no such fate befalls the right hon. Gentleman. [HON. MEMBERS: "On Thursday."] I have no idea whether the candidate for the leadership of his party whom he is not supporting has other intentions for him. I shall leave that to the private grief of the Conservative party.
The right hon. Gentleman appeared a little surprised by my hon. Friend's explanation of our plans. He showed that at one or two points in his speech, when he almost suggested that the Bill was a sensible measure which he could support. He acknowledged the case for mobilising receipts; much of his speech concentrated on detailed matters. At the last moment, however, he displayed the knee-jerk reaction and he could not bring himself to say, "This is a sensible measure. We will ask a few questions to get the detail right, but we will support it." He gave that knee-jerk reaction because Tory central office had already issued the brief, so we had to hear from him that the Opposition would vote against the Bill.
I detect a little ambivalence in the right hon. Gentleman's attitude and we will look to tease that out in the weeks ahead. In any case, I hope that he will be with us next week and is not relegated to the Back Benches.
My hon. Friend the Member for Weaver Vale (Mr. Hall) made a powerful speech in which he highlighted the damage caused by the cuts in housing investment in the past 18 years. He spoke in particular about the problems confronting Halton borough council and Vale Royal district council. I have happy memories of visiting those authorities just over a year ago. My hon. Friend rightly focused on the huge benefits that will result from the Bill to assist those authorities and many others to improve their housing provision.
The hon. Member for Runnymede and Weybridge (Mr. Hammond) made a maiden speech that contained a fascinating historical fact. He told us that this week marks the 782nd anniversary of the signing of the Magna Carta. One always learns something in the House. He also said that although his constituency is probably one of the most

prosperous in the country, it has problems. He spoke particularly of pollution and traffic problems, but I am sure that he recognises that there are also housing problems in that district. However, he seemed to rely more heavily on the briefing he had received from Conservative central office than on a full understanding of the Bill when making some of his observations, not least his claim that the Bill would lead to significant increases in council taxes and rents. I have to tell him that, contrary to that claim, the capital receipts initiative will not lead to an increase in council tax or rents. There is no reason why either rents or council tax levels should rise as a result of the initiative. We shall be issuing supplementary credit approvals which will receive revenue support in the usual way.
My hon. Friend the Member for Bristol, West (Valerie Davey), in a confident and impressive maiden speech, outlined the overwhelming evidence of housing need in Bristol and highlighted the problems of homelessness and bad housing. She described a community that was divided, despite the symbolism of the Clifton suspension bridge, by which most of us know her constituency. She spoke of a community with great wealth on one side and great poverty on the other.
Repeatedly, throughout the debate, we heard the theme of a divided, fractured society in which a substantial number of people do not share in the advantages enjoyed by the well-to-do. It is our intention as a Government to break down those divisions, to repair those fractures and to create a more equal and united society.

Mr. Cash: Will the hon. Gentleman explain how the proposals in the Bill will, as he claims, make more money available to the people who want it in the constituencies represented by Labour Members?

Mr. Raynsford: The hon. Gentleman clearly did not listen to the explanation given by my hon. Friend the Minister of State in her opening remarks. She made it clear that we would, through supplementary credit approvals, issue additional opportunities to authorities and that the supplementary credit approvals would be calculated two thirds by relation to need to spend, which would ensure that areas in need would be able to get the additional investment necessary to improve their housing or to build new housing.
The hon. Member for Torbay (Mr. Sanders), whom I congratulate on his extremely narrow victory in the general election, is the Liberal Democrats' spokesman on housing matters, but he seemed a little unsure about the specific proposals. In particular, he seemed doubtful as to whether allocations to local authorities should be based on need, so I repeat my response to the hon. Member for Stone (Mr. Cash). Under the capital receipts initiative, we propose to distribute resources to a formula of one third on the basis of where they were generated and two thirds on the basis of need. The generalised needs index will be used as a measure of need. Equally, we have changed the formula for the allocation of housing investment finance to ensure that 50 per cent. of the allocation will now be made on the basis of need, which was not the case previously. The hon. Member for Torbay will recognise from that our commitment to tackle housing need.
My hon. Friend the Member for Alyn and Deeside (Mr. Jones) spoke, in a moving speech, of the needs of his constituents, especially those in bad housing in


Flintshire and of the problems of the unemployed. He clearly recognised the valuable contribution that the Bill will make, both to meet housing needs and to tackle the problems of unemployment.
The hon. Member for Mid-Norfolk (Mr. Simpson) acknowledged the extent of unmet housing need, but offered no suggestion on how that need might best be met. His opposition to the Bill seemed to smack of party loyalty rather than reflect the more rigorous analysis that I am sure he gives to subjects with which he is better acquainted, such as the country's defence needs.
My hon. Friend the Member for Bury, North (Mr. Chaytor), in an accomplished, witty and engaging maiden speech, shared his enthusiasm for the gastronomic delights of Bury and for the recent success of its football team. He also revealed an interest in history by demonstrating his knowledge, not only of Sir Robert Peel, but of the 1903 cup final success of his football team.
The hon. Member for Taunton (Mrs. Ballard), in an effective maiden speech, conjured up an image of the rebellious tradition in Somerset and the west country, which might have made her party's leader anxious. I hope that she has no problems on that score. She strongly endorsed the role of local authorities in housing. After 18 years when local authorities have been denigrated and run down by the Conservatives, I can assure her that the Government will support them and see them having a strong and positive role in this area.
The hon. Lady also talked about people sleeping rough in her constituency. My hon. Friend the Minister of State has already announced that we shall consider offering funding to support local authorities that are tackling rough sleeping in their areas. I am sure that the hon. Lady will want to pursue that possibility.
My hon. Friend the Member for Stretford and Urmston (Ms Hughes), in a thoughtful and committed speech, revealed her understanding of her constituents' needs and highlighted the importance of investment, not just for housing but for regeneration. She recognised the contribution that the Bill will have to make in that respect.
The hon. Member for Stone (Mr. Cash) argued the case for more discretion for local authorities. I am not sure that his Front Bench was terribly comfortable with that argument. It was not long before the hon. Gentleman got on to Maastricht; I suspect that the right hon. Member for Skipton and Ripon (Mr. Curry) would have been even more unhappy, had he been here, listening to his hon. Friend discussing Maastricht in this context.
The hon. Member for Stone also advocated additional investment for tackling the needs of the homeless and youth unemployment. The Government welcome any sinner who repents.
My hon. Friend the Member for Harrow, West (Mr. Thomas), in another impressive maiden speech, highlighted the problems of divided communities in a constituency with great wealth and great poverty. Among other things, he spoke about the need for proper housing for those with special needs who are some of the most vulnerable people in society. I endorse the concerns that he voiced about the need for an adequate supply of special needs housing.
The hon. Member for Mid-Worcestershire (Mr. Luff) saw this as a melancholy occasion. From his perspective, I imagine it was—listening to a litany of defeated

Conservative candidates being referred to in maiden speeches. He revealed the ambivalence among Tory Members on housing issues for, unlike some of his colleagues, who had argued against additional expenditure, he argued that the Bill would not generate enough money to tackle the problems. The hon. Gentleman must make up his mind: is he in favour of tackling the problems more effectively, in which case there is a need for the increased investment that the Bill will achieve, or is he lining up with the diehards in his party who oppose any increased investment to meet housing need? It is a classic illustration of how the Opposition are split on this subject.
My hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman), in yet another impressive maiden speech, referred to football clubs. He has the benefit of not one, but two, successful clubs in his constituency. He paid generous tributes to his predecessors—but I had better keep quiet on that score since he mentioned me among them. I briefly had the good fortune to represent part of the constituency for which he now sits.
The hon. Member for South Cambridgeshire (Mr. Lansley) expressed criticism of the Government's failure, in his view, to publish guidance before publishing the Bill, which he believes should have been brought in after the Budget. I must tell him that we are acting now because it is right and proper to put these measures in place as soon as possible so as to achieve increased investment to tackle the needs that the Bill is designed to meet. There is no benefit in delay. We shall publish guidance shortly in the form of consultation with local authorities, and my right hon. Friend the Chancellor will make clear all the financial implications and the arrangements for the supplementary credit approvals in his Budget speech—so the hon. Gentleman will not have long to wait. We are acting quickly so that people who have waited far too long for the prospect of a decent home are left waiting no longer.
My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) acknowledged the problem of representing Westminster on the Labour Benches. I understand her ambivalence, given the antics of the majority party on the council in her area. She highlighted the problems of leaseholders—especially the many who are encountering real difficulties achieving the benefit of leasehold reform—and the problems of private tenants confronted with huge rent increases.
My hon. Friend rightly focused on the link between housing and ill-health. She is absolutely right that the issues of housing and health cannot be separated. The initiative that we are announcing tonight will help to ensure that some people get the benefit of better housing, which will improve their health prospects.
The hon. Member for Sutton and Cheam (Mr. Burstow) referred to the repairs backlog and regeneration projects involving the need for more than bricks and mortar. We are concerned, as he is, about the importance of maximising the regeneration benefit of this initiative and, as my hon. Friend the Minister of State said, there will be encouragement for associated regeneration initiatives, connected with the housing activity that is the main thrust of this initiative.
The hon. Gentleman also spoke about the needs of people with disabilities and mentioned part M of the Building Regulations. We are studying that issue with


some urgency, because it is important and we need to reach decisions soon as to the right way to proceed in the interests of people with disabilities. I can assure him that the Government are taking that issue very seriously.

Mr. Burstow: rose—

Mr. Raynsford: If the hon. Gentleman will bear with me, this has been a long debate in which many speeches I need to mention have been made, and time is short.
My hon. Friend the Member for Doncaster, Central (Ms Winterton), in another impressive maiden speech, highlighted the regeneration potential in her constituency and in Yorkshire and Humberside. She is a powerful advocate for Doncaster, and in response to her request for my hon. Friend the Minister of State or me to visit Doncaster, I can assure her that we shall certainly want to do so as soon as a suitable opportunity arises.
The hon. Member for Maidenhead (Mrs. May) repeated the anxieties expressed by other Conservative Members about what she felt was undue haste in introducing legislation. I have already responded to that. We are doing this because there is a clear need to meet the needs of people who are badly housed and homeless. We need to move swiftly; we will not delay.
My hon. Friend the Member for Mitcham and Morden (Ms McDonagh) spoke eloquently about housing need in her area and did so as someone with great experience, having worked in housing and chaired her borough's housing committee. She made an important and valuable contribution to the debate and will, I know, continue to do so in the House in the years ahead.
My hon. Friend the Member for The Wrekin (Mr. Bradley) also declared a Westminster connection, although that was not the main focus of his speech as he has found a constituency far from the borough in which the House is located. In a wide-ranging speech, he mentioned rural problems, BSE and opencast mining. I can assure him that my hon. Friend the Minister of State responsible for planning policy and I are both working hard on the opencast mining issue and the minerals planning guidance. We are looking closely at PPG3 in relation to the need for social housing as part of new housing developments.
The hon. Member for West Dorset (Mr. Letwin) made three criticisms of our policy. He is wrong on two counts and I simply differ from him on the third. First, he said that resources would not create sustainable employment but would cause the country to revert to boom-bust. That is pretty rich from a representative of the party that is synonymous with boom-bust. I also say to him that our phasing arrangements are designed to ensure that growth is gradual and progressive, that there is no unacceptable boom and that the increased investment is sustainable. That is an integral part of our policy.
The hon. Gentleman's second point was that there would be substitution: that local authorities would spend the money elsewhere or would spend the receipts then use other money elsewhere. They will be unable to do so, because the receipts will be targeted and we shall ensure that local authorities come up with schemes that meet the specific objectives that the Government are setting. That is why we are consulting and giving local authorities clear

guidelines. We shall maintain a close watch on how those sums are spent. We want them used to the best effect to ensure that there is investment in areas where it is needed.

Mr. Letwin: rose—

Mr. Raynsford: If the hon. Gentleman will bear with me, I shall come to his third point. He said that there would be extra spending. We recognise that fact. The extra spending is necessary to repair the damage left by the Conservative Government.
My hon. Friend the Member for Stroud (Mr. Drew) discussed poverty and deprivation in his constituency, which is in the midst of some of the country's loveliest countryside. He pleaded for protection of the countryside and for social housing. I entirely endorse those concerns.
My hon. Friend the Member for St. Helens, North (Mr. Watts) paid an important tribute to his predecessor, now Lord Evans, who is well known and greatly valued by Labour Members. He also paid tribute to his constituency and made a strong plea for its housing needs.
My hon. Friend the Member for Liverpool, Garston (Ms Eagle), made another highly accomplished maiden speech. There was a moment of ambivalence when I was unsure whether I was listening to her or her sister. The quality of her voice and how she presented her case were reminiscent of the qualities that have made her sister, the Under-Secretary of State for the Environment, Transport and the Regions, such an effective and respected Member.
My hon. Friend the Member for Norwich, North (Dr. Gibson) spoke with great feeling and knowledge about his area's housing needs. He discussed the backlog of older housing in need of modernisation, which I have seen in the course of several visits to his constituency. Those problems will be tackled by the Bill.
My hon. Friend the Member for Putney (Mr. Colman) told us a tale of two councils—the contrast in the performance of the London boroughs of Merton and of Wandsworth in looking after their areas' housing needs. He highlighted the distressing case of individuals who have suffered as a result of Wandsworth council's gross maladministration and incompetence.
The hon. Member for Guildford (Mr. St. Aubyn) gave us an interesting vignette of the old-style Tory prejudice against council housing and councils. I fear that he is ideologically blinkered and that it will probably be some time before the realities of life begin to sink in. I hope that they will one day, for his own sake.
My hon. Friend the Member for Pudsey (Mr. Truswell), in the last of the maiden speeches, spoke humorously about the glories of his constituency—prams, fish and chips, and cricket. He paid a generous—tribute to his predecessor and highlighted the importance not just of housing but the welfare-to-work initiatives.
Summing up for the Opposition, the hon. Member for Hertsmere raised three main issues. He described our initiative as a bonfire in a hall of mirrors, which was an entirely inappropriate image. The only bonfire that relates to this subject is the bonfire of the vanities, which consumed his party in the last general election. Its vanity was to assume that it had a right to govern. The British electorate gave it its come-uppance on 1 May. The hon. Gentleman then claimed that he had discovered a change of stance on the part of the Government over public


expenditure. I have always made it clear that releasing capital receipts would increase public expenditure but that it was right to use that money to invest in houses and get people back to work. We differ from the Opposition in that we believe that resources should be put to good effect whereas they simply want to avoid meeting their responsibilities.
I stress again that we shall shortly consult local authorities on the mechanisms for releasing capital receipts. We propose to do so on the basis of two thirds in relation to need and one third in relation to the location of receipts.
The Government's capital receipts initiative has received an overwhelming endorsement from the public and from the wide range of people and organisations who know about the country's housing needs and understand the wide economic benefits that will flow from increased investment in housing and regeneration.
The Chartered Institute of Housing has stated that it is very pleased that the Government have presented the Bill so quickly. The Local Government Association has said that the rapid move to introduce legislation on capital receipts is very welcome. The National Housing Federation has consistently called for the release of resources to tackle disrepair and the need for new housing. The House-Builders Federation has hailed the policy as a welcome first step. The Royal Institution of Chartered Surveyors has commented that the measure could create 13,000 new jobs a year for the construction industry in each of the next five years.
The only people who have failed to respond positively are Conservative Members. They are caught in a time warp. They are clinging on to the memory of their own time in office. They are incapable of recognising that that world ended on 1 May. Like the Bourbons, they seem incapable of learning anything and incapable of forgetting anything.
The Conservatives are the party which allowed homelessness to double and allowed repossessions on a scale never before seen in this country. They slashed investment in housing while forcing up rents and leaving tenants trapped in benefit. Their record speaks for itself. The people of Britain have delivered their verdict. They have elected a new Government with a mandate for change.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 409, Noes 151.

Division No. 30]
[10 pm


AYES


Abbott, Ms Diane
Barnes, Harry


Ainger, Nick
Barron, Kevin


Ainsworth, Robert (Cov'try NE)
Battle, John


Allan, Richard (Shef'ld Hallam)
Bayley, Hugh


Allen, Graham (Nottingham N)
Beard, Nigel


Anderson, Donald (Swansea E)
Beckett, Rt Hon Mrs Margaret


Armstrong, Ms Hilary
Begg, Miss Anne (Aberd'n S)


Ashdown, Rt Hon Paddy
Beith, Rt Hon A J


Ashton, Joe
Bell, Martin (Tatton)


Atherton, Ms Candy
Bell, Stuart (Middlesbrough)


Atkins, Ms Charlotte
Benn, Rt Hon Tony


Austin, John
Benton, Joe


Baker, Norman
Bermingham, Gerald


Ballard, Mrs Jackie
Berry, Roger


Banks, Tony
Best, Harold





Blackman, Mrs Liz
Davies, Geraint (Croydon C)


Blears, Ms Hazel
Davies, Rt Hon Ron (Caerphilly)


Blizzard, Robert
Davis, Terry (B'ham Hodge H)


Blunkett, Rt Hon David
Dawson, Hilton


Borrow, David
Dean, Ms Janet


Bradley, Keith (Withington)
Dewar, Rt Hon Donald


Bradley, Peter (The Wrekin)
Dismore, Andrew


Bradshaw, Ben
Dobbin, Jim


Brown, Rt Hon Nick (Newcastle E & Wallsend)
Dobson, Rt Hon Frank



Donohoe, Brian H


Brown, Russell (Dumfries)
Doran, Frank


Browne, Desmond (Kilmarnock)
Drew, David


Buck, Ms Karen
Drown, Ms Julia


Burden, Richard
Dunwoody, Mrs Gwyneth


Burgon, Colin
Eagle, Angela (Wallasey)


Burnett, John
Eagle, Ms Maria (L'pool Garston)


Burstow, Paul
Edwards, Huw


Butler, Christine
Efford, Clive


Byers, Stephen
Ellman, Ms Louise


Campbell, Alan (Tynemouth)
Etherington, Bill


Campbell, Mrs Anne (C'bridge)
Fearn, Ronnie


Campbell, Menzies (NE Fife)
Field, Rt Hon Frank


Campbell, Ronnie (Blyth V)
Fisher, Mark


Campbell-Savours, Dale
Fitzpatrick, Jim


Canavan, Dennis
Fitzsimons, Ms Lorna


Cann, Jamie
Flint, Ms Caroline


Caplin, Ivor
Flynn, Paul


Casale, Roger
Follett, Ms Barbara


Caton, Martin
Foster, Rt Hon Derek


Cawsey, Ian
Foster, Don (Bath)


Chapman, Ben (Wirral S)
Foster, Michael Jabez (Hastings)


Chaytor, David
Foster, Michael John (Worcester)


Chidgey, David
Foulkes, George


Chisholm, Malcolm
Fyfe, Maria


Clapham, Michael
Galbraith, Sam


Clark, Rt Hon Dr David (S Shields)
Galloway, George


Clark, Dr Lynda (Edinburgh Pentlands)
Gapes, Mike



Gardiner, Barry


Clark, Paul (Gillingham)
George, Andrew (St Ives)


Clarke, Charles (Norwich S)
George, Bruce (Walsall S)


Clarke, Eric (Midlothian)
Gerrard, Neil


Clarke, Rt Hon Tom (Coatbridge)
Gibson, Dr Ian


Clarke, Tony (Northampton S)
Gilroy, Mrs Linda


Clelland, David
Godsiff, Roger


Clwyd, Mrs Ann
Goggins, Paul


Coaker, Vernon
Golding, Mrs Llin


Coffey, Ms Ann
Gordon, Mrs Eileen


Cohen, Harry
Gorrie, Donald


Coleman, Iain (Hammersmith & Fulham)
Graham, Thomas



Grant, Bernie


Colman, Anthony (Putney)
Griffiths, Ms Jane (Reading E)


Connarty, Michael
Griffiths, Nigel (Edinburgh S)


Cooper, Ms Yvette
Griffiths, Win (Bridgend)


Corbett, Robin
Grocott, Bruce


Corbyn, Jeremy
Grogan, John


Corston, Ms Jean
Gunnell, John


Cotter, Brian
Hain, Peter


Cousins, Jim
Hall, Mike (Weaver Vale)


Cox, Tom
Hall, Patrick (Bedford)


Cranston, Ross
Hamilton, Fabian (Leeds NE)


Crausby, David
Hanson, David


Cryer, Mrs Ann (Keighley)
Harman, Rt Hon Ms Harriet


Cryer, John (Hornchurch)
Harris, Dr Evan


Cummings, John
Harvey, Nick


Cunliffe, Lawrence
Heal, Mrs Sylvia


Cunningham, Jim (Cov'try S)
Healey, John


Cunningham, Rt Hon Dr John (Copeland)
Henderson, Ivan (Harwich)



Hepburn, Stephen


Curtis-Thomas, Ms Clare
Heppell, John


Dafis, Cynog
Hesford, Stephen


Dalyell, Tam
Hewitt, Ms Patricia


Darling, Rt Hon Alistair
Hill, Keith


Darvill, Keith
Hinchliffe, David


Davey, Edward (Kingston)
Hodge, Ms Margaret


Davey, Valerie (Bristol W)
Hoey, Kate


Davies, Rt Hon Denzil (Llanelli)
Home Robertson, John






Hood, Jimmy
McNamara, Kevin


Hoon, Geoffrey
McNulty, Tony


Hope, Philip
MacShane, Denis


Hopkins, Kelvin
McWalter, Tony


Howarth, George (Knowsley N)
McWilliam, John


Howells, Dr Kim
Mahon, Mrs Alice


Hoyle, Lindsay
Mallaber, Ms Judy


Hughes, Ms Beverley (Stretford & Urmston)
Mandelson, Peter



Marek, Dr John


Hughes, Kevin (Doncaster N)
Marsden, Gordon (Blackpool S)


Hughes, Simon (Southwark N)
Marsden, Paul (Shrewsbury)


Humble, Mrs Joan
Marshall, David (Shettleston)


Hurst, Alan
Marshall, Jim (Leicester S)


Hutton, John
Marshall-Andrews, Robert


Iddon, Brian
Martlew, Eric


Illsley, Eric
Maxton, John


Jackson, Ms Glenda (Hampst'd)
Meacher, Rt Hon Michael


Jackson, Mrs Helen (Hillsborough)
Meale, Alan


Jamieson, David
Merron, Ms Gillian


Jenkins, Brian (Tamworth)
Michael, Alun


Johnson, Alan (Hull W)
Milburn, Alan


Johnson, Ms Melanie (Welwyn Hatfield)
Miller, Andrew



Mitchell, Austin


Jones, Barry (Alyn & Deeside)
Moffatt, Laura


Jones, Ms Fiona (Newark)
Moonie, Dr Lewis


Jones, Helen (Warrington N)
Moran, Ms Margaret


Jones, Ieuan Wyn (Ynys Môn)
Morgan, Ms Julie (Cardiff N)


Jones, Ms Jenny (Wolverh'ton SW)
Morley, Elliot



Morris, Ms Estelle (B'ham Yardley)


Jones, Jon Owen (Cardiff C)
Morris, Rt Hon John (Aberavon)


Jones, Dr Lynne (Selly Oak)
Mounfford, Ms Kali


Jones, Martyn (Clwyd S)
Mudie, George


Jones, Nigel (Cheltenham)
Mullin, Chris


Jowell, Ms Tessa
Murphy, Jim (Eastwood)


Keeble, Ms Sally
Naysmith, Dr Doug


Keen, Mrs Ann (Brentford)
Norris, Dan


Keetch, Paul
O'Brien, Mike (N Warks)


Kemp, Fraser
O'Brien, William (Normanton)


Kennedy, Jane (Wavertree)
O'Hara, Edward


Khabra, Piara S
Olner, Bill


Kidney, David
O'Neill, Martin


Kilfoyle, Peter
Opik, Lembit


King, Andy (Rugby)
Organ, Mrs Diana


King, Miss Oona (Bethnal Green)
Osborne, Mrs Sandra


Kingham, Tessa
Palmer, Dr Nick


Kirkwood, Archy
Pearson, Ian


Kumar, Dr Ashok
Pendry, Tom


Ladyman, Dr Stephen
Perham, Ms Linda


Lawrence, Ms Jackie
Pickthall, Colin


Laxton, Bob
Pike, Peter L


Lepper, David
Plaskitt, James


Leslie, Christopher
Pollard, Kerry


Levitt, Tom
Pond, Chris


Lewis, Ivan (Bury S)
Pope, Greg


Lewis, Terry (Worsley)
Pound, Stephen


Liddell, Mrs Helen
Powell, Sir Raymond


Linton, Martin
Prentice, Ms Bridget (Lewisham E)


Livingstone, Ken
Prentice, Gordon (Pendle)


Livsey, Richard
Prescott, Rt Hon John


Lloyd, Tony (Manchester C)
Primarolo, Dawn


Llwyd, Elfyn
Prosser, Gwyn


Lock, David
Purchase, Ken


Love, Andy
Quin, Ms Joyce


McAllion, John
Quinn, Lawrie


McAvoy, Thomas
Radice, Giles


McCabe, Stephen
Rammell, Bill


McCafferty, Ms Chris
Rapson, Syd


McCartney, Ian (Makerfield)
Raynsford, Nick


McDonagh, Ms Siobhain
Reed, Andrew (Loughborough)


Macdonald, Calum
Reid, Dr John (Hamilton N)


McDonnell, John
Rendel, David


McFall, John
Robertson, Rt Hon George (Hamilton S)


McGuire, Mrs Anne



McKenna, Ms Rosemary
Robinson, Geoffrey (Cov'try NW)


Mackinlay, Andrew
Rogers, Allan


McMaster, Gordon
Rooker, Jeff





Rooney, Terry
Taylor, Ms Dari (Stockton S)


Ross, Ernie (Dundee W)
Taylor, David (NW Leics)


Rowlands, Ted
Thomas, Gareth (Clwyd W)


Roy, Frank
Thomas, Gareth R (Harrow W)


Ruane, Chris
Timms, Stephen


Ruddock, Ms Joan
Tipping, Paddy


Russell, Bob (Colchester)
Todd, Mark


Russell, Ms Christine (Chester)
Touhig, Don


Ryan, Ms Joan
Trickett, Jon


Salter, Martin
Truswell, Paul


Sanders, Adrian
Turner, Dennis (Wolverh'ton SE)


Savidge, Malcolm
Turner, Desmond (Kemptown)


Sawford, Phil
Turner, Dr George (NW Norfolk)


Sedgemore, Brian
Twigg, Derek (Halton)


Shaw, Jonathan
Twigg, Stephen (Enfield)


Sheerman, Barry
Tyler, Paul


Sheldon, Rt Hon Robert
Vaz, Keith


Shipley, Ms Debra
Vis, Dr Rudi


Simpson, Alan (Nottingham S)
Walley, Ms Joan


Singh, Marsha
Ward, Ms Claire


Skinner, Dennis
Wareing, Robert N


Smith, Rt Hon Andrew (Oxford E)
Watts, David


Smith, Ms Angela (Basildon)
White, Brian


Smith, Miss Geraldine (Morecambe & Lunesdale)
Whitehead, Alan



Wicks, Malcolm


Smith, Ms Jacqui (Redditch)
Wigley, Dafydd


Smith, John (Glamorgan)
Williams, Rt Hon Alan (Swansea W)


Smith, Llew (Blaenau Gwent)
Williams, Dr Alan W (E Carmarthen)


Soley, Clive



Southworth, Ms Helen
Williams, Mrs Betty (Conwy)


Spellar, John
Willis, Phil


Squire, Ms Rachel
Wills, Michael


Starkey, Dr Phyllis
Wilson, Brian


Stevenson, George
Winnick, David


Stewart, David (Inverness E)
Winterton, Ms Rosie (Doncaster C)


Stewart, Ian (Eccles)
Wise, Audrey


Stinchcombe, Paul
Wood, Mike


Stoate, Dr Howard
Woolas, Phil


Stott, Roger
Wray, James


Stringer, Graham
Wright, Dr Tony (Cannock)


Stuart, Mrs Gisela (Edgbaston)
Wyatt, Derek


Stunell, Andrew



Sutcliffe, Gerry
Tellers for the Ayes:


Taylor, Rt Hon Mrs Ann Dewsbury
Mr. Jim Dowd and



Mr. Clive Betts


NOES


Ainsworth, Peter (E Surrey)
(Rushcliffe)


Amess, David
Clifton-Brown, Geoffrey


Ancram, Rt Hon Michael
Collins, Tim


Arbuthnot, James
Colvin, Michael


Atkinson, David (Bour'mth E)
Cormack, Sir Patrick


Atkinson, Peter (Hexham)
Cran, James


Baldry, Tony
Curry, Rt Hon David


Bercow, John
Davis, Rt Hon David (Haltemprice)


Beresford, Sir Paul
Davies, Quentin (Grantham & Stamford)


Blunt, Crispin



Boswell, Tim
Day, Stephen


Bottomley, Peter (Worthing W)
Dorrell, Rt Hon Stephen


Bottomley, Rt Hon Mrs Virginia
Duncan, Alan


Brady, Graham
Duncan Smith, Iain


Brazier, Julian
Emery, Rt Hon Sir Peter


Brooke, Rt Hon Peter
Evans, Nigel


Browning, Mrs Angela
Faber, David


Bruce, Ian (S Dorset)
Fabricant, Michael


Burns, Simon
Fallon, Michael


Butterfill, John
Flight, Howard


Cash, William
Forth, Eric


Chapman, Sir Sydney (Chipping Barnet)
Fowler, Rt Hon Sir Norman



Fox, Dr Liam


Chope, Christopher
Fraser, Christopher


Clappison, James
Gale, Roger


Clark, Rt Hon Alan (Kensington)
Garnier, Edward


Clark, Dr Michael (Rayleigh)
Gibb, Nick


Clarke, Rt Hon Kenneth
Gill, Christopher






Gillan, Mrs Cheryl
Nicholls, Patrick


Goodlad, Rt Hon Alastair
Norman, Archie


Gorman, Mrs Teresa
Page, Richard


Gray, James
Paice, James


Green, Damian
Paterson, Owen


Greenway, John
Pickles, Eric


Grieve, Dominic
Prior, David


Gummer, Rt Hon John
Redwood, Rt Hon John


Hague, Rt Hon William
Robathan, Andrew


Hamilton, Rt Hon Sir Archie
Robertson, Laurence (Tewk'b'ry)


Hammond, Philip
Roe, Mrs Marion (Broxbourne)


Hawkins, Nick
Rowe, Andrew (Faversham)


Hayes, John
Ruffley, David


Heald, Oliver
St Aubyn, Nick


Heseltine, Rt Hon Michael
Sayeed, Jonathan


Hogg, Rt Hon Douglas
Shephard, Rt Hon Mrs Gillian


Horam, John
Simpson, Keith (Mid-Norfolk)


Howard, Rt Hon Michael
Soames, Nicholas


Howarth, Gerald (Aldershot)
Spelman, Mrs Caroline


Hunter, Andrew
Spicer, Sir Michael


Jack, Rt Hon Michael
Spring, Richard


Jackson, Robert (Wantage)
Stanley, Rt Hon Sir John


Jenkin, Bernard (N Essex)
Steen, Anthony


Johnson Smith, Rt Hon Sir Geoffrey
Streeter, Gary



Swayne, Desmond


Key, Robert
Syms, Robert


King, Rt Hon Tom (Bridgwater)
Tapsell, Sir Peter


Kirkbride, Miss Julie
Taylor, Ian (Esher & Walton)


Lansley, Andrew
Taylor, John M (Solihull)


Leigh, Edward
Taylor, Sir Teddy


Letwin, Oliver
Temple-Morris, Peter


Lewis, Dr Julian (New Forest E)
Townend, John


Lidington, David
Tredinnick, David


Lilley, Rt Hon Peter
Trend, Michael


Loughton, Tim
Tyrie, Andrew


Luff, Peter
Viggers, Peter


Lyell, Rt Hon Sir Nicholas
Wardle, Charles


MacGregor, Rt Hon John
Waterson, Nigel


McIntosh, Miss Anne
Whitney, Sir Raymond


MacKay, Andrew
Whittingdale, John


Maclean, Rt Hon David
Widdecombe, Rt Hon Miss Ann


McLoughlin, Patrick
Wilkinson, John


Madel, Sir David
Willetts, David


Major, Rt Hon John
Wilshire, David


Malins, Humfrey
Winterton, Mrs Ann (Congleton)


Mates, Michael
Winterton, Nicholas (Macclesfield)


Maude, Rt Hon Francis
Yeo, Tim


Mawhinney, Rt Hon Dr Brian
Young, Rt Hon Sir George


May, Mrs Theresa



Merchant, Piers
Tellers for the Noes:


Moss, Malcolm
Mr. Bowen Wells and



Mr. Richard Ottaway.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

Orders of the Day — LOCAL GOVERNMENT FINANCE (SUPPLEMENTARY CREDIT APPROVALS) BILL [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Local Government Finance (Supplementary Credit Approvals) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable out of money so provided under any other Act.—[Mr. Graham Allen.]

Question agreed to.

Orders of the Day — Auditors (Regulation)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Graham Allen.]

Mr. Austin Mitchell: I congratulate my hon. Friend the Minister on his appointment and on being able to share with me the fun and excitement of this evening's Adjournment debate. Audit is not often regarded as a fun subject: indeed, auditors are supposed to be accountants who cannot stand the excitement of working in the profession.
The debate arises because the Government are about to publish a Bill to allow accountancy partnerships to set up limited liability partnerships. That would ensure that all the partners in a practice, who are currently liable down to their last Jaguar and their last yacht, could evade those liabilities. It seems curious that such a limitation of liabilities should be proposed by a Labour Government because it is a major concession to a huge vested interest: the big accountancy firms.
Such firms have a statutory monopoly of audit, which is given to protect the stakeholders. Stakeholders are identified by the various Companies Acts over the years as shareholders, creditors, employees—even journalists, as well as the public and markets. It is the job of auditors to provide information to all those stakeholders, invigilate the performance of firms and audit the accounts on their behalf. They are failing in that responsibility.
Such failure has been clearly demonstrated by a number of scandals—Bank of Credit and Commerce International, Maxwell, Levitt, Polly Peck, MTM, Queens Moat Houses, British and Commonwealth, Barings and Resort Hotels. There is an enormous list of failures and scandals, about which in each case the cry has gone up, "Where were the auditors?" Now we know. They were busy lobbying the Department of Trade and Industry for protection from liability for the consequences of their own failure.
If auditors want to avoid such liability, they can turn themselves into limited liability companies. When I was serving on the Standing Committee of the Companies Bill in 1989, I remember auditors lobbying for such a prerogative. They said that it was extremely important that they should be allowed to turn themselves into limited liability companies. We agreed to it at the behest of the then Government. Having agreed to it, the auditors now do not want to become limited liability companies because they want to remain partnerships.
There are various tax perks and advantages of being a partnership. There is also the great advantage of secrecy—auditors do not have to publish anything about their affairs, performance or activities. They want to keep the tax perks and secrecy, but they want protection from the liability that is supposed to be conceded by a partnership, making the partners liable for everything in each case.
Such limitation of liability seems a curious principle for a Labour Government to enact. It is anti-consumer to do so. After the Caparo judgment, the consumer has all too little redress or rights against auditors. If we concede limitation of liability, such redress will be even more limited.
The principle is curious, too, in the light of the very dubious and dodgy tactics used by big accountancy houses to try to get such limitation of liability.


They lobbied first through Ian Greer Associates and attempted to persuade the then Minister of Corporate Affairs, Neil Hamilton, to concede the principle. He ran up against a small obstacle when the Law Commission ruled that the proportion of liability that they were then asking for was against the public interest, so that avenue was blocked off.
Price Waterhouse then decided to transfer its lobbying activity to Jersey, work on the tin-pot legislature there in order to get the prerogative and then come back and blackmail the British Government into conceding the principle so as to stop competition from Jersey. In effect, it bought legislation in Jersey, and fast-track legislation, too: it was rushed through with very little debate. The legislation cost £1 million to draw up, and through a series of murky deals of the kind that go on in Jersey, it achieved its goal.
Price Waterhouse did not want to use the privilege that it had been given to set up in Jersey because who in their right mind in this country would use dodgy auditors set up in a tin-pot jurisdiction in Jersey to audit the accounts of a major public limited company? It wanted to blackmail the British Government into conceding what it had already bought in Jersey. It is an interesting legislative procedure to go overseas, buy legislation, then come back and say to the British Government, "Do the same for us." The tactic seems to have worked under the previous Government, since here we are, as a Labour Government, bringing in legislation that was obviously prepared under that previous Government.
Such limitation of liability is curious because if we are to have fair trading the privilege must be extended to all partnerships of all kinds and to all firms that compete with big accountancy houses but do not audit, such as management selection and tax advice and consultancy services. It would be anti-competitive to make such a concession to just one section—the auditors—and not to all partnerships and all firms that compete with partnerships.
The real problem with the proposal is whether it is responsible government to confer such an enormous privilege on the auditors without the quid pro quo of a drastic change in the regulatory framework for auditing, which at present is totally inadequate. The regulation of auditing has always been kept privileged by the big accountancy houses and the professional bodies. The present structures are inefficient, ineffective and pathetic.
We have a structure of so-called self-regulation which essentially means that the mafia regulate the mafia. In other words, a trade association regulates itself. It would be unacceptable if a trade union asked to regulate industrial relations, but, because the regulator is a professional body, responsibility is conceded.
There is a proliferation of overlapping bodies. Regulation is mostly done by professional bodies as recognised supervisory bodies. The professional bodies are themselves dominated by the big accountancy houses, which give their partners and staff time off to run the professional institutes, whose powers are pathetic. For example, one of the biggest fines imposed by the regulatory structure was on Messrs. Jordan and Stone of Coopers and Lybrand for their infringement of the guidelines in accepting work on the liquidation of Polly

Peck when their firm was already involved. They were fined £1,000 each. What a massive, terrifying fine that was: the fees from the insolvency were £17 million, so the firm must have been terrified at such horrendous fines from the regulatory bodies. Only one partner has been disqualified by the regulatory procedure—and he retired to Switzerland. If that is regulation, I do not know what real discipline would be like.
The structure includes no compensation for defrauded consumers, and no investigation of audit practices is undertaken. Several major audit firms have been criticised by Department of Trade and Industry inspectors and inquiries. The buck is passed back to the professional bodies, which do nothing. However often one writes to them, nothing happens. They have not investigated the standards of any of the big accountancy houses. The Securities and Exchange Commission in the United States is planning to investigate Coopers and Lybrand, which has been involved in a series of headline scandals there, but we cannot hope for such an investigation here. What chance is there that one of the big firms will have its standards investigated by such a light-touch regulatory regime?
The regulatory bodies never report on audit failure. There were failures of the audit in Maxwell, Levitt, Polly Peck, Wallace Smith, Homes Assured and London United Investment. None of them was investigated. In the United States, the Kerry committee investigated the audit of the Bank of Credit and Commerce International. Price Waterhouse, which is an international body, said that it could not co-operate with an investigation in the US because it was a firm of British auditors. The fact that it sells its services internationally was apparently not relevant: because it is a British firm, it can refuse to give any evidence to the Kerry inquiry. It is no wonder that the Kerry Brown report states—for the Minister's information, it is in chapter 10—that the partnership structure inhibits international regulation. If someone has a case against Union Carbide, the case can be pursued in the American courts, but if someone has a case against Price Waterhouse UK, it cannot be pursued in the American courts. The same problem arose with KPMG and the Ferranti affair.
The Financial Reporting Panel has been set up and on 23 occasions it has found that published audited accounts were defective. The auditors had drawn a fee, established that the accounts were true and fair and given their approval; yet the Financial Reporting panel said that they were defective. There has never been an investigation of any of those 23 audit firms, and action has been taken against none of them. This is not regulation—it is a farce.
It is disastrous, as audit is dominated by the big firms which do 90 per cent. of audits for plcs and are in intense competition with each other as the sellers of services. They want to sell other services which are more profitable than audit. To do that, they want to get a foot in the door by cutting the price of the audit. They get the contract with the firm, and then use that as a market stall to sell other services. A classic example four years back was when Price Waterhouse—or half-Price Waterhouse, as it should be called—offered to cut the audit fee for the Prudential by £900,000 to get that work so that they could sell other services.
Such competition must debase the audit. It imposes pressure, as unqualified people are used, corners are cut and time is reduced. It produces a potential for disaster,


but firms are getting away with it because of the lack of regulation and effective inquiry, and because auditing standards are effectively under the control of the audit industry, whereas the licensing, monitoring, complaints, investigations and appeals are under the control of the accountancy bodies, which are, in turn, dominated by the big firms. It is a lovely little racket.
Trade associations cannot be regulators, and the only people excluded from all this are the consumers of accounts, the stakeholders, the public and anyone who loses money in the scandals produced by this situation. The last Government believed in self-regulation. The present Government believe in independent regulation—the principle that we are establishing in financial services and which we promised in the 1992 manifesto for accountancy and audit. We need independent regulation which will ban the sale of other services to audit clients, enforce the rotation of auditors, require auditors to report and detect fraud as they do in local government—they just do not want to take it on in the big firms-and acknowledge the public interest.
Any limitation of liability makes it essential that the Government as a quid pro quo impose independent regulation, because liability cannot be limited in the present regulatory framework without disasters ensuing for the consumers of accounts and without the powers of vested interests being increased. Such vested interests must be made answerable. It is wrong to make concessions to the accountancy firms unless we strengthen the power of stakeholders against negligent auditors. That would be disastrous, and certainly would not coincide with the purpose of the Government, who want to encourage and sustain a stakeholder society. We want to protect the consumer, and we need a regime which investigates standards, punishes derelictions and failures and gives confidence to stakeholders.
This is a monopoly based on a statute given to firms for public purposes which they are not fulfilling adequately. Only effective independent regulation can impose those purposes. We cannot have a situation in which such a concession can be given to auditors without the public being given some protection from the consequences of the failures of those auditors, and without a framework of regulation which requires them to fulfil their responsibilities. Independent regulation is the essential quid pro quo in this case—or perhaps I should say quo pro quid pro quid pro quid, because that is what will arise if this limitation of liability is conceded without effective regulation.

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I thank my hon. Friend the Member for Great Grimsby (Mr. Mitchell) for an animated, enthusiastic and provocative presentation of his case. Over the years, he has led the debate about the regulation of auditors, and his contribution has always been made from the point of view of the public interest. In that respect, my views are the same as his: the availability of reliable, audited accounts is a fundamental matter of public interest, and the proper regulation of auditors is an important aspect of maintaining confidence in the environment for doing business in the United Kingdom.
My hon. Friend will also be aware that the Government are committed, through our business manifesto, to ensuring that there is a framework of independent regulation for the

accountancy profession, of which statutory auditors are a part. He will appreciate that, in view of time constraints, I shall confine myself to the general criteria that must guide us in the matter. The criteria are effectiveness, independence and transparency.
My hon. Friend also referred to various proposals for changes to audit regulation and to the liability of auditors. Let me make it absolutely clear that we shall give a full and fair hearing to all proposals. We shall also give full consideration to the views expressed by all interested parties. As the Government, our fundamental responsibility is to come to a view on how to strike a fair overall balance, in the public interest. I assure my hon. Friend that we shall consider all proposals fully and rigorously from that standpoint.
An extensive framework for the regulation of auditing, derived ultimately from European Union legislation, was put in place by the Companies Act 1989. What particularly interests me is its effectiveness, and how we improve any aspects of the system that are in need of improvement. Under the Act, the Secretary of State for Trade and Industry is responsible for recognising appropriately qualified bodies to maintain standards of qualification and supervision within the profession. The bodies are required to submit annual reports to the Secretary of State on their reporting functions.
The qualifying and supervising bodies must ensure, for example, that auditors have undergone an appropriate period of theoretical study and of professional experience; that rules are in place to ensure that standards are maintained; and that auditors are fit and proper people, with the necessary standards of professional integrity. They also have systems of discipline, appeals systems and procedures for dealing with complaints.
In addition, the standards to which auditors work are set by a body, the Auditing Practices Board, half of whose members are practising auditors, the other half being business people, lawyers, academics and others with wide business experience—the stakeholders to whom my hon. Friend referred.
Whenever there is a company collapse, there is a rush to blame the auditors. Often, aggrieved parties will seek to sue the auditors for alleged negligence. I should like to consider two aspects of that: are there effective procedures for dealing with problems when something goes wrong; and is there an effective system of monitoring and feedback to raise general standards, so that problems are less likely to occur in the first place?
For major public interest cases, the joint disciplinary scheme operates as an independent investigator on behalf of the three main professional bodies and, after investigation, makes recommendations to them. The sponsoring bodies are currently reviewing the operation of the scheme and I shall, of course, take the closest interest in the proposals that they develop to improve its effectiveness.
I cannot comment on individual cases that are before the courts or under investigation, but I strongly agree with my hon. Friend's view that the system of investigation, for cases of major public interest and for all other cases, should be subject to continuing independent review.
That is an aspect which I shall certainly bear in mind when I receive the profession's own proposals for independent scrutiny of its regulatory activities. Underpinning that, there is, of course, the system of


monitoring of auditors set up by the 1989 Act, refined in the light of an extensive review in 1994, and overseen by the Secretary of State.
I want to talk about certain aspects of improving the system as a whole. My hon. Friend will be aware that the present system of annual reporting is transparent, in that the supervisory bodies' annual reports are published and laid before the House. As he will have seen, those reports provide a valuable pen picture of the way in which the bodies fulfil the requirements placed on them and highlight areas for improvement. The fifth set of reports has recently been submitted to the Department. I intend to scrutinise them and I am sure that my hon. Friend will do so, too. I look forward to hearing his views.
The audit monitoring process was the subject of extensive scrutiny by Peter Moizer, professor of accounting at Leeds university, at the request of my Department. His report was published in 1994. Professor Moizer considered in detail the monitoring arrangements put in place by the supervisory bodies. He concluded:
I believe that the monitoring units are working well and effectively and that self-regulation is being operated conscientiously.
Those are the views of an independent academic on the functioning of the monitoring process.
The report also made a number of recommendations for improvements to the audit monitoring processes. Many of the recommendations, which included an increase in the frequency of visits, to ensure that all firms would be visited over a five-year period, and greater co-ordination among the monitoring bodies, have been implemented by the bodies.
A recommendation for greater public scrutiny of the audit monitoring process is picked up by the professional bodies' current work on proposals for the creation of an independent oversight body. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) has written to my Department on that matter. I can assure him that I shall meet him and his colleagues at a later date to discuss the issues that he has put before me and my officials.
The annual reports to the Secretary of State include material on action taken against auditors who are found wanting and on the handling of complaints. I cannot pre-empt the contents of the reports for 1996, which have not yet been published, but I remind my hon. Friend the Member for Great Grimsby that in 1995, a total of 63 member firms of the Institute of Chartered Accountants in England and Wales had their registration withdrawn or surrendered, which is slightly more than the number to which my hon. Friend seemed to allude.

Mr. Mitchell: I was talking about the auditing of the major plcs. All the sanctions and disciplinary procedures are exercised energetically against smaller firms. The weight of regulation falls on them. The real problem, however, is the debasement of audit by the big firms, which are largely unaccountable and which dominate the regulation process.

Mr. McCartney: My hon. Friend has reiterated some of the issues that he has written to me about. I think that I have said that I am prepared to consider them as part of

the consultation process. I shall give the evidence that he has placed before me adequate consideration, as part of the consultation process that I shall have with him and with the individuals who advise him on the issue.

Mr. Andrew Stunell: When considering those matters, will the Minister take account of the experience in north America and in particular the regulatory structure in the United States, and perhaps apply some of the lessons that his hon. Friend drew to his attention, so that those structures can be applied in the United Kingdom?

Mr. McCartney: At the outset, I said that I was open to consideration of a range of issues, including the contribution that my hon. Friend has made this evening and in writing on numerous occasions. I welcome the hon. Gentleman to the Front Bench, by the way. I am not sure whether this is a Liberal Democrat takeover of the Opposition Front Bench, but he is a welcome sight after some of the individuals whom I occasionally have to face across the Dispatch Box. I wish him well and hope to see him on many more occasions.
As I said, in 1995, a total of 63 member firms of the English institute had their registration withdrawn. Restrictions were also placed on the registration of a further 107 firms—that is out of a total of 1,115 matters that were pursued by the institute following monitoring visits.
The firms, the professional bodies and the Auditing Practices Board are increasingly looking to ensure that lessons from past failures are brought to practitioners' attention.
Obviously, it is easy to criticise any system of delegated regulation and to say that those closely involved are not best placed to form an independent view of the effectiveness of the system. The answer to such doubts is to ensure the transparency of the system, so that its independence can be seen by all.
That brings me back to the Government's commitment to ensuring that there is a framework of independent regulation. That is the standpoint from which I shall be considering the proposals for the independent external review of their regulatory activities that the professional bodies are now preparing. My hon. Friend will understand that I cannot commit myself in advance on the view that I shall take on those proposals. I can, however, assure him that I come to the issue with an open, but not empty, mind and that I shall take his views into full account in assessing the proposals and reaching a decision on the way forward.
I am grateful to my hon. Friend for raising limited liability partnership, which is a good example of a matter on which we must listen to all parties, and find a solution based on the balance of public interest. The professions have asked whether it is possible to establish a legal structure that would enable them to do business with limited liability, but with the organisational features of a partnership rather than a company. At present in the UK, they must choose between organising as a partnership, with unlimited personal liability and little public disclosure, or as a company, with limited liability and extensive public disclosure. The key difference from the point of view of the client is that any claim that he may have against a partnership is against each and all the


partners individually. With a company, his claim is against the assets of the company itself. That is why the Companies Acts require extensive public disclosure, particularly about the state of a company's finances.
It is absolutely right that any business entity with a limited liability should be required to disclose information. However, it does not necessarily follow that the internal organisation of all limited liability entities should be exactly the same as that of companies, with directors, share capital and shareholders. Many businesses prefer a partnership structure, particularly when many skilled people wish to join in the ownership of the firm on the basis of the skills that they bring to it, without having to make substantial capital contributions to the firm at the outset.
Many states in the United States of America have legislated in the past few years to make such business vehicles available, with the internal organisation of a partnership but the external obligations of a company. They are being copied by an increasing number of offshore centres such as Jersey, which was mentioned by my hon. Friend. No doubt they hope to attract registration from countries such as Britain whose partnership legislation has been unchanged for more than a century.
It was against that background that the Government announced on 22 May our intention to publish draft legislation on limited liability partnership. I emphasise the two basic principles of our approach. Legislation must provide appropriate safeguards for those dealing with the firm, and its details should be worked out in close consultation with all those affected.
I cannot say today what the precise balance and detail of the legislation will be, but I assure my hon. Friends that; in considering its details, we shall take the most careful account of all the representations that have been

made in the public consultation that has just closed. We shall also provide full opportunity for consideration of the details of the draft legislation before it is introduced.

Mr. Jim Cousins: Can my hon. Friend assure the House that there will be no move to introduce legislation on limited liability partnerships until the Government are satisfied about the quality, substance and robustness of the independent regulatory regime to which he referred?

Mr. McCartney: I assure my hon. Friend that my Department will not publish any Bill, materials or proposals until we are satisfied that they meet the criteria set out in the manifesto and in what I have said this evening. There is no point in my giving commitments tonight and then going back on that promise during consultation on the draft legislation.
In conclusion, I thank my hon. Friend the Member for Great Grimsby for his personal contribution to the continuing debate on standards of auditing and of audit regulation. This area is vital for the credibility and reliability of accounts, and so for the competitiveness of the UK. I have listened carefully to him and to my hon. Friend the Member for Newcastle upon Tyne, Central. I shall bear their remarks in mind when I consider in detail the various aspects of the issue. As my hon. Friend the Member for Great Grimsby knows, I am happy once again to offer to meet him and his advisers. I am keen to hear the views of all those with an interest in those important matters, including the hon. Member for Hazel Grove (Mr. Stunell)—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twelve minutes to Eleven o'clock.